1. Selected comparative financial statements of Dougless Corporation follow:

Dougless Corporation

Comparative Income Statements

For Years Ended December 31, 2006 and 2005

2006 2005

Net Sales $199,800 $167,000

Cost of Goods Sold 109,890 87,175

Gross Profit 89,910 79,825

Selling Expenses 23,680 20,790

Administrative Expenses 17,760 15,610

Total Expenses 41,440 36,400

Net Income $ 48,470 $ 43,425

Dougless Corporation

Comparative Balance Sheets

December 31, 2006 and 2005

2006 2005

ASSETS

Cash $ 20,000 $ 15,000

Accounts Receivable 25,860 12,660

Inventory 10,000 6,000

Long-Term Investments 0 2,700

Plant Assets, Net 113,810 114,660

Total Assets $169,670 $151,020

LIABILITIES & EQUITY

Current Liabilities $ 23,370 $ 20,180

Common Stock 47,500 47,500

Other Paid-in Capital 14,850 14,850

Retained Earnings 83,950 68,490

Total Liabilities & Equity $169,670 $151,020

Calculate the following ratios: SHOW YOUR WORK!

Inventory Turnover = Cost of Goods Sold_________

Average Inventory

			RATIO
2006	COGS
	Average Inventory

Current Ratio = Current Assets

Current Liabilities

			RATIO
2006	Current Assets
	Current Liabilities

Debt to Total Assets Ratio = Total Liabilities

Total Assets

			RATIO
2006	Total Liabilities
	Total Assets

Profit Margin Ratio = Net Income

Net Sales

			RATIO
2006	Net Income
	Net Sales

2. Condensed financial data of Columbus Company appear below:

COLUMBUS COMPANY

Comparative Balance Sheet

December 31

2011 2010 Difference

Assets

Cash $ 61,000 $ 35,000 $ 26,000 Inc.

Accounts receivable 75,000 53,000 22,000 Inc.

Inventories 120,000 132,000 12,000 Dec.

Prepaid expenses 19,000 25,000 6,000 Dec.

Investments 100,000 75,000 25,000 Inc.

Plant assets 325,000 250,000 75,000 Inc.

Accumulated depreciation (65,000) (60,000) 5,000 Inc.

Total $635,000 $510,000

Liabilities and Stockholders' Equity

Accounts payable $ 93,000 $ 75,000 $ 18,000 Inc.

Accrued expenses payable 29,000 24,000 5,000 Inc.

Bonds payable 120,000 160,000 40,000 Dec.

Common Stock 275,000 170,000 105,000 Inc.

Retained earnings 118,000 81,000 37,000 Inc.

Total $635,000 $510,000

COLUMBUS COMPANY

Income Statement

For the Year Ended December 31, 2011

Sales $470,000

Less:

Cost of goods sold $300,000

Operating expenses (excluding depreciation) 60,000

Depreciation expense 17,000

Income taxes 20,000

Interest expense 18,000

Loss on sale of plant assets 3,000 418,000

Net income $ 52,000

Additional information:

1. New plant assets costing $100,000 were purchased for cash in 2011.

2. Old plant assets costing $25,000 and with a book value of $13,000 were sold for $10,000 cash.

3. Bonds with a face value of $40,000 were retired.

4. A cash dividend of $15,000 was declared and paid during the year.

5. Common stock was issued for cash.

Instructions: Prepare a statement of cash flows for the year using the indirect method. Use form on next page.

Columbus Company Statement of Cash Flows January 1, 2011 to December 31, 2011
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Total Adjustments
Net cash provided by/used in Operating Activities:
Cash flows from Investing Activities:
Net Cash provided by/used in Investing Activities:
Cash flows from Financing Activities:
Net Cash provided by/used in Financing Activities
Net increase/decrease in cash
Cash Balance, December 31, 2010
Cash Balance, December 31, 2011