Comparative financial statement data for Carmono Company follow:

	This Year	Last Year
Assets
Cash	$ 18.50	$ 36.00
Accounts receivable	94.00	87.00
Inventory	147.50	136.40
Total current assets	260.00	259.40
Property, plant, and equipment	297.00	238.00
Less accumulated depreciation	63.20	47.40
Net property, plant, and equipment	233.80	190.60
Total assets	$ 493.80	$ 450.00
Liabilities and Stockholders Equity
Accounts payable	$ 88.50	$ 68.00
Common stock	206.00	157.00
Retained earnings	199.30	225.00
Total liabilities and stockholders equity	$ 493.80	$ 450.00

For this year, the company reported net income as follows:

Sales	$ 1,950.00
Cost of goods sold	1,170.00
Gross margin	780.00
Selling and administrative expenses	760.00
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.

Carmono Company
Statement of Cash Flows
For This Year Ended December 31
Operating activities:
Investing activities:
Financing activities:
Beginning cash and cash equivalents
Ending cash and cash equivalents

Cash dividends

Decrease in accounts payable

Decrease in accounts receivable

Decrease in inventory

Decrease in plant and equipment

Depreciation

Increase in accounts payable

Increase in accounts receivable

Increase in inventory

Increase in plant and equipment

Issuance of common stock

Repurchase of common stock