Mary Walker, president of Rusco Company, considers $ to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $ 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

This Year Last Year

Assets

Current assets:

Cash $ $

Accounts Receivable

Inventory

Prepaid expenses

Total current assets

Longterm 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 liabilities

Bonds Payable

Total liabilities

Stockholders equity:

Common stock

Retained earnings

Total stockholders\' equity

Total liabilities and stockholders\' equity $ $

Rusco Company

Income Statement

For This Year Ended July

Sales $

Cost of goods sold

Gross margin

Selling and administrative expenses

Net operating income

Nonoperating items:

Gain on sale of investments $

Loss on sale of equipment

Income before taxes

Income taxes

Net income $

The following additional information is available for this year.

The company declared and paid a cash dividend.

Equipment was sold during the year for $ The equipment originally cost $ and had accumulated depreciation of $

Longterm investments that cost $ were sold during the year for $

The company did not retire any bonds payable or repurchase any of its common stock.

Required:

Using the indirect method, compute the net cash provided byused in operating activities for this year.

Prepare a statement of cash flows for this year.

Compute free cash flow for this year.