20X1 20X2 $ 150,000 540,000 672,000 65,200 $1,427,200 96,200 $ 547,800 551,000 708,000 32,400 $1,839,200 82,100 $ 2,850,000 1,870,000 $ 3,100,000 2,100,000 980,000 $2,503,400 1,000,000 $2,921,300 Assets Current assets: Cash Accounts receivable (net) Inventory Prepaid expenses Total current assets Investments (long-term securities) Gross plant and equipment Less: Accumulated depreciation Net plant and equipment 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 Stockholders' equity: Preferred stock, $100 par value Common stock, $1 par value Capital paid in excess of par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 306,000 510,000 74,900 $ 890,900 $ 593,000 510,000 51,400 $1,154,400 193,000 $1,083,900 255,000 $1,409,400 $ 90,000 150,000 350,000 829,500 $1,419,500 $2,503,400 $ 90,000 150,000 350,000 921,900 $1,511,900 $2,921,300 Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the Year Ended December 31, 20X2 Sales $3,330,000 Cost of goods sold 1,980,000 Gross profit $1,350,000 Selling and administrative expense 588,000 Depreciation expense 230,000 Operating income $ 532,000 Interest expense 81,600 Earnings before taxes $ 450,400 Taxes 161,000 Earnings after taxes $ 289,400 Preferred stock dividends 10,000 Earnings available to common stockholders $ 279,400 Shares outstanding 150,000 Earnings per share $ 1.86 Statement of Retained Earnings For the Year Ended December 31, 20X2 Retained earnings, balance, January 1, 20x2 $829,500 Add: Earnings available to common stockholders, 20x2 279,400 Deduct: Cash dividends declared and paid in 20x2 187,000 Retained earnings, balance, December 31, 20x2 $921,900 Answer is not complete. CROSBY CORPORATION Statement of Cash Flows For the Year Ended December 31, 20X2 Cash flows from operating activities: $ 160,000 $ EA Adjustments to determine cashflow from operating activities: Add back depreciation 150,000 Increase in accounts receivable (50,000) Increase in inventory (20,000) X Decrease in prepaid expenses 20,000 $ Increase in accounts payable 190,000 X Decrease in accrued expenses (20,000) Total adjustments Net cash flows from operating activities Cash flows from investing activities: Increase in bonds payable Preferred stock dividends paid x (10,000) X Net cash flows from investing activities Cash flows from financing activities: Common stock dividends paid (50,000) $ 270,000 430,000 $ 50,000 > $ 40,000 $ Net cash flows from financing activities $ (50,000) b. Compute the book value per common share for both 20X1 and 20X2 for the Crosby Corporation. (Round your answers to 2 decimals places.) Answer is complete but not entirely correct. Book value $ 8.58 X 20X1 20X2 $ 9.42 c. If the market value of a share of common stock is 2.8 times book value for 20X2, what is the firm's P/E ratio for 20X2? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) X Answer is complete but not entirely correct. P/E ratio 24.87 X times b. Compute the book value per common share for both 20X1 and 20X2 for the Crosby Corporation. (Round your answers to 2 decimals places.) Answer is complete but not entirely correct. Book value $ 8.58 X 20X1 20X2 $ 9.42 c. If the market value of a share of common stock is 2.8 times book value for 20X2, what is the firm's P/E ratio for 20X2? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) X Answer is complete but not entirely correct. P/E ratio 24.87 X times
