1. (50 pts.) On the basis of the following data for Branch Co. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000. Cash Accounts Receivable (net) Inventories Land Equipment Accumulated Depreciation Accounts Payable (merchandise creditors) Common Stock, $10 par Paid-In Capital in Excess of Par-Common Stock Retained Earnings Current Year $ 65,000 78,000 106,500 Prior Year $ 54,000 85,000 90,000 $ 53,500 200,000 62,000 214,000 $529,500 20,000 495,000 370,000 (215,000) (158,000) $529,500 $461,000 $ 55,000 170,000 60,000 176,000 $461,000

1. (50 pts.) On the basis of the following data for BranchCo. for the current and preceding years ended December 31, prepare a statement of cash flows using the indirect method. Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were for net income of $56,000 and cash dividends declared and paid of $18,000. 2. (25 pts) Using the Balance Sheet from above, conduct a horizontal analysis to determine the changes in balance sheet accounts for the years shown. 3. (25 pts) Compute the following analytical measures for the current year assuming the current market value of common stock is $20 per share: Solvency Measures: Current Ratio Quick Ratio Profitability Measures: Earnings per share of common stock Dividends per share of common stock Dividend Yield