Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $ 5.00 $ 9.00 Accounts receivable 40.00 33.00 Inventory 80.00 66.20 Total current assets 125.00 108.20 Property, plant, and equipment 216.00 184.00 Less accumulated depreciation 41.60 31.20 Net property, plant, and equipment 174.40 152.80 Total assets $ 299.40 $ 261.00 Liabilities and Stockholders’ Equity Accounts payable $ 48.00 $ 41.00 Common stock 98.00 76.00 Retained earnings 153.40 144.00 Total liabilities and stockholders’ equity $ 299.40 $ 261.00 For this year, the company reported net income as follows: Sales $ 600.00 Cost of goods sold 360.00 Gross margin 240.00 Selling and administrative expenses 220.00 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.

For each of the following situations, indicate whether you agree or disagree with the financial reporting practice employed and state the basic assumption, component, or accounting principle that is applied (if you agree) or violated (if you disagree).wagner corporation adjusted the valuation of all assets and liabilities to reflect changes in the purchasing power of the dollar.spooner oil company changed its method of accounting for oil and gas exploration costs from successful efforts to full cost. no mention of the change was included in the financial statements. the change had a material effect on spooner's financial statements.cypress manufacturing company purchased machinery having a five-year life. the cost of the machinery is being expensed over the life of the machinery.rudeen corporation purchased equipment for $180,000 at a liquidation sale of a competitor. because the equipment was worth $230,000, rudeen valued the equipment in its subsequent balance sheet at $230,000.davis bicycle company received a large order for the sale of 1,000 bicycles at $100 each. the customer paid davis the entire amount of $100,000 on march 15. however, davis did not record any revenue until april 17, the date the bicycles were delivered to the customer.gigantic corporation purchased two small calculators at a cost of $32.00. the cost of the calculators was expensed even though they had a three-year estimated useful life.esquire company provides financial statements to external users every three years.