Refer to the following financial statements for Crosby Corporation: Comparative
ID: 2731096 • Letter: R
Question
Refer to the following financial statements for Crosby Corporation:
Comparative Balance Sheets
For 2010 and 2011
Prepare a statement of cash flows for the Crosby Corporation: (Amounts to be deducted should be indicated with a minus sign.)
Cash flows from operating activities:
Adjustments to determine cash flow from operating activities:
Total adjustments
Net cash flows from operating activities
Cash flows from investing activities:
Net cash flows from investing activities
Cash flows from financing activities:
Net cash flows from financing activities
Net increase (decrease) in cash flows
Compute the book value per common share for both 2010 and 2011 for the Crosby Corporation. (Round your answers to 2 decimals places.)
If the market value of a share of common stock is 2.4 times book value for 2011, what is the firm’s P/E ratio for 2011? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Income Statement
For the Year Ended December 31, 2011 Sales $ 3,470,000 Cost of goods sold 2,230,000 Gross profit $ 1,240,000 Selling and administrative expense 678,000 Depreciation expense 298,000 Operating income $ 264,000 Interest expense 85,400 Earnings before taxes $ 178,600 Taxes 148,000 Earnings after taxes $ 30,600 Preferred stock dividends 10,000 Earnings available to common stockholders $ 20,600 Shares outstanding 150,000 Earnings per share $ .14
Explanation / Answer
Crosby Corporation a Cash flow Statement for the period ending Dec 31.2011. Indirect Method Details Amt $ Cash Flow From Operating Activities Net Income 30,600 Adjustments to reconcile net income/loss to net cash provided Add Depreciation 298,000 Add Amortization Less : Capital Gain Less Investment Income Add : Capital Loss Add: investment Loss Increased Accounts Receivable (net) (38,000) Increased Inventory (5,000) Decreased Prepaid Expenses 32,600 Increased Accounts Payable 284,000 Decreased Accrued Expenses (22,000) Income Tax Payable Total Cash Flow From Operating Activities 580,200 Cash Flow From Investing Activities Cash Inflow from sales of assets Cash outflow from purchase of assets (540,000) Cash Inflow from sales of investments 8,400 Cash outflow from purchase of Investments Total Cash Flow From Investing Activities (531,600) Cash Flow From Financing Activities Cash received from issue of Common stock Cash Received from Bond 52,000 Cash Paid for Dividend Payment (185,000) Cash paid for Bond redemption - TotalCash Flow From Financing Activities (133,000) Total Cash Flow from Operating. Investing and Financing Activities (84,400) Intial Cash Balance 179,000 Net Effect of Cash Flow during the period (84,400) Closing Cash Balance 94,600 b Details Year 2010 Year 2011 Total stockholders Equity 975,800 821,400 Less Preferred stock balue 90,000 90,000 Total book Value common stock 885,800 731,400 No of Shares outstanding 150,000 150,000 Book Value per share $ 5.91 $ 4.88 c Year 2011 Market Value per share =2.4*4.88= $ 11.70 EPS = 0.14 P/E ratio= 11.7/0.14= 83.59
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