Rainbow Company's income statement and comparative balance sheets follow. 

During 2018, the following transactions and events occurred:

1. Sold long-term investments costing $57,000 for $60,000 cash.

2. Purchased land for cash.

3. Capitalized an expenditure made to improve the building.

4. Sold equipment for $ 14,000 cash that originally cost $46,000 and had $27,000 accumulated depreciation.

5. Issued bonds payable at face value for cash.

6. Acquired a patent with a fair value of $25,000 by issuing 250 shares of preferred stock at par value.

7. Declared and paid a $50,000 cash dividend.

8. Issued 3,000 shares of common stock for cash at $8 per share.

9. Recorded depreciation of $ 16,000 on buildings and $23,000 on equipment.

REQUIRED:

a. Compute the change in cash and cash equivalents that occurred during 2018.

b. Prepare a 2018 statement of cash flows using the indirect method.

c. Prepare separate schedules showing.

(1) cash paid for interest and for income taxes.

(2) noncash investing and financing transactions.

d. Compute its

(1) operating cash flow to current liabilities ratio. 

(2) operating cash flow to capital expenditures ratio

(3) free cash flow.

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RAINBOW COMPANY Income Statement For Year Ended December 31, 2018 Sales. $750,000 15,000 Dividend income. Total revenue 765,000 Cost of goods sold Wages and other operating experises Depreciation expense.. Patent amortization expense $440,000 130,000 39,000 7,000 Inlerest expense.. Income tax expense.. Loss on sale of equipment Gain on sale of investments. 13,000 44,000 5,000 (3,000) 675,000 Net income. . $ 90.000