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Problem 13-13 (Algo) Prepare and Interpret a Statement of Cash Flows; Free Cash Flow [LO13-1, LO13-2, LO13-3] Mary Walker, president of Rusco Company, considers $26.000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $21,000 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 assets: -ash $ 21,080 $ 40,200 Accounts Receivable 228 , 480 217 ,808 Inventory 255, 480 199, 680 Prepaid expenses 11, 280 22,280 Total current assets 516, 080 088' 640 long-term investments 108, 080 150,080 Plant and equipment 872,080 080'95/ Less accumulated depreciation 213, 080 191 , 808 Net plant and equipment 659, 080 564,208 Total assets $ 1, 283,080 5 1,194,080 Liabilities and Stockholders Equity Current liabilities: Accounts payable $ 236,600 $ 176,280 Accrued liabilities 8,608 16,280 income taxes payable 46, 880 080' 2+ Total current liabilities 292,080 234, 480 Bonds Payable 218, 080 Total liabilities 800 OTS 346, 480 stockholders equity : Common stock 650, 080 080'DE9 Retained earnings 123 , 080 089' LIZ Total stockholders equity 773 , 080 847 ,680 total liabilities and stockholders equity $ 1, 283, Bee $ 1, 194,eee Rusco Company Income Statement For This Year Ended July 31 $ 920,080 cost of goods sold 080' 545 shess margin 345,080 selling and administrative expenses 246,180 Net operating income 98 , 980 Noneperating - temp: Gain on sale of investment: 3 23 , 602 Loss on sale of equipment (7.280) 15.980 Income before taxes 114.780 Income taxes 34, 380 Net income 3 se, 320 The following additional information is available for this year The company declared and paid a cash dividend. Equipment was sold during the year for $48.800. The equipment originally cost $102,000 and had accumulated depreciation of $46,000. c. Long-term investments that cost $42,000 were sold ouring the year for $6 . 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 provided by used in operating activities for this year 2. Prepare a statement of cash flows for this year 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 vities for this year
