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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 $39,000in cash was available at the end of 2014. 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 July 31, 2014 and 2013
	2014		2013
Assets
Current assets:
Cash	$	39,000	$	61,800
Accounts Receivable		228,800		241,200
Inventory		271,600		210,400
Prepaid expenses		23,800		43,800
Total current assets		563,200		557,200
Long-term investments		162,000		240,000
Plant and equipment		908,000		774,000
Less accumulated depreciation		222,000		197,200
Net plant and equipment		686,000		576,800
Total assets	$	1,411,200	$	1,374,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	196,600	$	256,400
Accrued liabilities		10,400		19,800
Income taxes payable		61,200		51,000
Total current liabilities		268,200		327,200
Bonds Payable		272,000		148,000
Total liabilities		540,200		475,200
Stockholders equity:
Common stock		655,000		720,000
Retained earnings		216,000		178,800
Total stockholders' equity		871,000		898,800
Total liabilities and stockholders' equity	$	1,411,200	$	1,374,000

Rusco Company Income Statement For the Year Ended July 31, 2014
Sales		$	1,280,000
Cost of goods sold			800,000
Gross margin			480,000
Selling and administrative expenses			342,400
Net operating income			137,600
Nonoperating items:
Gain on sale of investments	$32,000
Loss on sale of equipment	(10,800)		21,200
Income before taxes			158,800
Income taxes			47,520
Net income		$	111,280

The following additional information is available for the year 2014.

a.	The company declared and paid a cash dividend.
b.	Equipment was sold during the year for $63,200. The equipment had originally cost $138,000 and had accumulated depreciation of $64,000.
c.	Long-term investments that had 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.

1.)Using the indirect method, compute the net cash for operating activities for 2014 2.)Prepare a statement of cash flows for 2014

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