Mary Walker, president of Rusco Company, considers $47,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $42.000 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. points Rusco Company Comparative Balance Sheet at July 31 This Year Last Year ebook $ 42,000 257,880 274,380 25,900 609,880 171,880 914,820 223,580 690,580 $1,461,500 $ 65,480 245, 120 212, 280 47,480 579, 180 255,000 777, eee 198, 180 578, 9ee $1,404,080 Assets Current assets: 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 liabilities Bonds Payable Total liabilities Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 259,780 10,780 63,680 334, see 281,980 615, eee $ 180,480 20,480 52.500 253.380 154, eee 4 e7,380 807. see 39.000 846,500 $1,461,580 735,000 261,780 996,780 $1,404,080 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 $ 33. see Loss on sale of equipment (11,400) Income before taxes Income taxes $1,340, eee 837,580 502,580 358.450 144,850 22,180 166, 150 49,710 116,440 Net income $ The following additional information is available for this year. a. The company declared and paid a cash dividend. b. Equipment was sold during the year for $65.600. The equipment originally cost $144,000 and had accumulated depreciation of $67,000. c. Long-term investments that cost $84.000 were sold during the year for $117.500. d. The company did not retire any bonds payable or repurchase any of its common stock. Requlred: 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. Answer is not complete. 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.) S 132,700 X Rusco Company Statement of Cash Flows-Indirect Method (partial) Net income Adjustments to convert net income to a cash basis: Decrease in accounts receivable X $ 12,700 X Decrease in prepaid expenses (254,250) X (38.610) (280.160) (147.480) Required 1 Required 2 > 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) Rusco Company Statement of Cash Flows For This Year Ended July 31 Operating activities: Net cash provided by operating activities S Investing activities: Additions to plant and equipment $ (281,000) Proceeds from sale of equipment 85,600 Proceeds from sale of long-term investments 117.500 99,840 X (97.000) Net cash used in investing activities Financing activities: Issuance of bonds payable Issuance of bonds payable Cash dividends paid 147.000 x 29,000 (201.340) Net cash used in financing activities (25.340) (23.400) 85,400 42.000 Beginning cash and cash equivalents Ending cash and cash equivalents Requlred: 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. % Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute free cash flow for this year. (Negative amount should be indicated by a minus sign.) Free cash flow