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 Carmonos free cash flow for this year.

• Required 1
• Required 2

Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts. Round your intermediate calculations and final answers to 2 decimal places.)

Carmono Company
Statement of Cash Flows
For This Year Ended December 31
Operating activities:
Net incomeselected answer correct		not attempted
Adjustments to convert contribution margin to a cash basis:selected answer incorrect
Depreciationselected answer correct	not attempted
Increase in accounts receivableselected answer correct	not attempted
Increase in inventoryselected answer correct	not attempted
Increase in accounts payableselected answer correct	not attempted
not attempted	not attempted	0.00
Net cash provided by investing activitiesselected answer incorrect		0.00
Investing activities:
Cash dividendsselected answer incorrect	not attempted
not attempted	not attempted
not attempted		0.00
Financing activities:
Cash dividendsselected answer correct	not attempted
not attempted	not attempted
not attempted	not attempted
not attempted		0.00
not attempted		0.00
Beginning cash and cash equivalents		not attempted
Ending cash and cash equivalents		$0.00

• Required 2

Compute Carmonos free cash flow for this year. (Negative amount should be indicated by a minus sign. Round your intermediate calculations and final answer to 2 decimal places.)

Free cash flow

not attempted