Question

Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement 4.5 For the Year Ended December 31, 20x2 $ 3,650,000 2,230,000 $1,420,000 654,000 273,000 $ 493,000 85,300 $ 407,700 186,000 $ 221,700 10,000 points Sales Cost of goods sold Gross profit Selling and administrative expense Depreciation expense Operating income Interest expense Earnings before taxes Skipped eBook Тахев Earnings after taxes Preferred stock dividends 211,700 Earnings available to common stockholders Shares outstanding Earningo per share 150,000 1.41 Hint Print Statement of Retained Earninge For the Year Ended December 31, 20X2 $1,370,100 211,700 141,000 Retained earnings, balance, January 1, 20x2 Add: Earnings available to common stockholders, 20x2 Deduct: Cash dividends declared and paid in 20x2 Retained earnings, balance, December 31, 20X2 $1,440,800 Comparative Balance sheete For 20X1 and 20x2 Year-End Year-End 20x2 20x1 Assets Current assets: Cash $ 137,000 541,000 697,000 65,600 $1,440,600 95,800 $ 107,100 571,000 717,000 32,800 Accounts receivable (net) Inventory Prepaid expenses Total current assets S1 89,00. Investments (long-term securities) Gross plant and equipment Less: Accumulated depreciation Net plant and equipment $ 2,770,000 1,220,000 $ 3,420,000 1,493,000 1,927,000 $3,443,900 1,550,000 $3,086,400 Total assets Liabilities and Stockholders' Equity Current liabilities: Accounts payable Notes payable Accrued expenses Total current liabilities Long-term liabilities: Bonds payable, 20x2 Total liabilities $ 616,000 501,000 51,100 $1,168,100 369,000 501,000 73,300 $ 943,300 245,000 $1,413,100 183,000 $1,126,300 Stockholders' equity: Preferred stock, $100 par value Common stock, $1 par value Capital paid in excess of par Retained earnings Total stockholders' equity 90,000 150,000 350,000 1,440,800 $2,030,800 90,000 150,000 350,000 1,370,100 $1,960,100 Total liabilities and stockholders' equity $3,086,400 $3,443,900 a. Prepare a statement of cash flows for the Crosby Corporation: (Amounts to be deducted should be indicated with parentheses or a minus sign.) 00

Answer 1

1.

CROSBY CORPORATION
Statement of Cash flows
For the Year Ended December 31, 20X2
Cash flows from operating activities
Net Income		$    221,700
Adjustments to determine cashflow from operating activities;
Depreciation expense	$    273,000
Increase in accounts receivable	$    (30,000)
Increase in inventory	$    (20,000)
Decrease in prepaid expense	$       32,800
Increase in accounts payable	$    247,000
Decrease in accrued expense	$    (22,200)
Total adjustments		$    480,600
Net cash cash flow from operating activities		$    702,300
Cash flows from investing activities
Cash paid to purchase plant and equipment	$ (650,000)
Cash received from sale of investment	$         6,800
Net cash flow used by investing activities		$ (643,200)
Cash flows from financing activities
Cash paid for dividends	$ (151,000)
Cash received from issuance of bonds	$       62,000
Net cash flow used by financing activities		$    (89,000)
Change in cash		$    (29,900)
Cash and at beginning of period		$    137,000
Cash and at end of period		$    107,100

2. Book value per common shares = (Total stockholders equity - Preferred stock) / Number of shares outstanding

	20X1	20X2
Book value per common shares	($1,960,100 - $90,000) / 150,000 = $12.47	($2,030,800 - $90,000) / 150,000 = $12.94

3.

Price earning ratio = Earnings per Share / Market Value per Share

Price earning ratio = $1.41 / ($12.94*1.7)

Price earning ratio = 0.06

You can reach me over comment box if you have any doubts. Please rate this answer