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 $42,000in cash was available at the end of 2014. 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 July 31, 2014 and 2013
	2014		2013
Assets
Current assets:
Cash	$	42,000	$	65,400
Accounts Receivable		232,400		245,100
Inventory		274,300		212,200
Prepaid expenses		25,900		47,400
Total current assets		574,600		570,100
Long-term investments		171,000		255,000
Plant and equipment		914,000		777,000
Less accumulated depreciation		223,500		198,100
Net plant and equipment		690,500		578,900
Total assets	$	1,436,100	$	1,404,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	199,300	$	259,700
Accrued liabilities		10,700		20,400
Income taxes payable		63,600		52,500
Total current liabilities		273,600		332,600
Bonds Payable		281,000		154,000
Total liabilities		554,600		486,600
Stockholders equity:
Common stock		662,500		735,000
Retained earnings		219,000		182,400
Total stockholders' equity		881,500		917,400
Total liabilities and stockholders' equity	$	1,436,100	$	1,404,000

Rusco Company Income Statement For the Year Ended July 31, 2014
Sales		$	1,340,000
Cost of goods sold			837,500
Gross margin			502,500
Selling and administrative expenses			358,450
Net operating income			144,050
Nonoperating items:
Gain on sale of investments	$33,500
Loss on sale of equipment	(11,400)		22,100
Income before taxes			166,150
Income taxes			49,710
Net income		$	116,440

The following additional information is available for the year 2014.

a.	The company declared and paid a cash dividend.
b.	Equipment was sold during the year for $65,600. The equipment had originally cost $144,000 and had accumulated depreciation of $67,000.
c.	Long-term investments that had 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.

Required:
1.	Using the indirect method, compute the net cash for operating activities for 2014. (Negative amount should be indicated by a minus sign.)

2.	Prepare a statement of cash flows for 2014. (List any deduction in cash and cash outflows as negative amounts.)

3.	Compute free cash flow for 2014. (Negative amount should be indicated by a minus sign.)