Mary Walker, president of Rusco Company, considers $39,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $34,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker Rusco Company Comparative Balance sheet at July 31 This Year Last Year Assets Current assetst Cash Accounts Receivable Inventory Prepaid expenses Total current assets Long term Investments Plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current libilities Bonds Payable Total liabilities Stockholders' equity Common stock Retained earnings Total stockholders' equity 34,000 246,600 267,100 20,30 568,000 147,00 898,00 219,500 678,500 $1,393,500 $ 55,800 234,700 207,400 37,800 535,700 215,000 769,000 195,700 573,300 $1,324,000 $ 250,900 9,989 57,200 318,000 257,000 575,000 $ 178,300 18,800 48,500 246,109 138,000 356, 100 747.500 71.000 618 500 695.000 244,000 939,000 Saw Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 747,500 71,000 818,500 $1,393,500 695,000 244,900 939,909 $1,324,000 Rusco Company Income Statement For This Year Ended July 31 Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income Nonoperating items: Gain on sale of investments $29,500 Loss on sale of equipment (9,800) Income before taxes Income taxes Net Income $1,180,000 737,500 442,500 315,650 126,850 19,700 146,550 43.870 $102,680 The following additional information is available for this year. . The company declared and paid a cash dividend b. Equipment was sold during the year for $59.200. The equipment originally cost $128,000 and had accumulated depreciation $59.000 c Long-term investments that cost $68,000 were sold during the year for $97500 d. The company did not retire any bonds Davable or repurchase any of its common stock Required: 1. Using the indirect method, compute the net cash provided by used in operating activities for this year. 2. Prepare a statement of cash flows for this year. 3. Compute free cash flow for this year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the indirect method, compute the net cash provided by/used in operating activities for this year. (List any deduction in cash and cash outflows as negative amounts.) Rusco Company Statement of Cash Flows Indirect Method (partial)