Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 8.50 $ 16.00 Accounts receivable 54.00 47.00 Inventory 97.50 84.40 Total current assets 160.00 147.40 Property, plant, and equipment 237.00 198.00 Less accumulated depreciation 47.20 35.40 Net property, plant, and equipment 189.80 162.60 Total assets $ 349.80 $ 310.00 Liabilities and Stockholders’ Equity Accounts payable $ 58.50 $ 48.00 Common stock 126.00 97.00 Retained earnings 165.30 165.00 Total liabilities and stockholders’ equity $ 349.80 $ 310.00 For this year, the company reported net income as follows: Sales $ 950.00 Cost of goods sold 570.00 Gross margin 380.00 Selling and administrative expenses 360.00 Net income $ 20.00 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year. Required: 1. Using the indirect method, prepare a statement of cash flows for this year. 2. Compute Carmono’s free cash flow for this year.
