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 Investing activities: Proceeds from sale of long-term investments Proceeds from sale of equipment Increase in inventory Additions to plant and equipment Net cash used in investing activities Financing activities: Issuance of bonds payable Issuance of common stock Cash dividends paid 5 0 0 Not cash used in financing activities Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents $ 0 Mary Walker, president of Rusco Company, considers $44,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $39,000 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 Last Year This Year $ 39,800 253,600 271,600 23,00 588,000 162,000 908,000 222,000 680,000 31,436,000 $ 61,800 241,200 210,400 43,800 552200 240,000 774,000 197/ 200 5707800 $1,374,000 Assets Current assets: Cash Accounts Receivable Inventory Prepaid expenses Total current assets Long-term investoints plant and equipment Less accumulated depreciation Net plant and equipment Total assets Liabilities and Stockholders' Equity Current abilities: Accounts payable Accrued Liabilities Income taxes payable Total current liabilities Bonds Payable Total liabilities Stockholders' equity: Con stock Retained earnings Total stockholders' equity Total abilities and stockholders' equity $ 256,400 10,400 61,200 328,000 222,000 600.000 $ 179,800 19,800 51,000 250, 600 148.000 398,600 785,000 51.000 836,000 $1,436,000 720,000 255 400 075,40 $1,374,000 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 $ 32,000 Loss on sale of equipment (10,800) Income before taxes Income taxes Net Incone $1,280,000 800,000 480,000 342, 480 137,600 21,200 158,800 47.52e $ 111,280 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 $63,200. The equipment originally cost $138,000 and had accumulated depreciation of $64,000 c. Long-term investments that cost $78,000 were sold during the year for $110,000 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 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
