CROSBY Corporation Income Statement For the year EndedDecember 31, 20X2
Sales	2,200,000
COGS	1,300,000
Gross Profit	900,000
Selling and administrative expense	420,000
Depreciation expense	150,000
Operating income	330,000
Interest expense	90,000
Earnings before taxes	240,000
Taxes	80,000
Earnings after taxes	160,000

Preferred stock dividends	10,000
Earnings available to common stockholders	150,000
Shares outstanding	120,000
EPS	1.25

Statement of retained Earnings For the year Ended December 31, 20X2
Retained earnings, balance, January 1, 20X2	500,000
Add: Earnings available to common stockholders, 20X2	150,000
Deduct: Cash dividends declared and paidin 20X2	50,000
Retained earnings, balance, December 31, 20X2	600,000

Comparative balanceSheets For 20X1 and 20X2
	Year-End 20X1	Year-End 20X2
Assets
Current assets:
Cash	70,000	100,000
Accounts receivable (net)	300,000	350,000
Inventory	410,000	430,000
Prepaid expenses	50,000	30,000
Total current assets	830,000	910,000
Investments	80,000	70,000
PPE	2,000,000	2,400,000
Less: accumulated depreciation	1,000,000	1,150,000
Net PPE	1,000,000	1,250,000
Total assets	1,910,000	2,230,000
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable	250,000	440,000
Notes payable	400,000	400,000
Accrued expenses	70,000	50,000
Total current liabilities	720,000	890,000
Long-term liabilities:
Bonds payable, 20X2	70,000	120,000
Total liabilities	790,000	1,010,000

Stockholders Equity:
Preferred stock, $100Par value	90,000	90,000
Common stock, $1 Par value	120,000	120,000
Capital paid in excess of par	410,000	410,000
Retained earnings	500,000	600,000
Total Stockholders Equity	1,120,000	1,220,000
Total liabilities and Stockholders Equity	1,910,000	2,230,000

Refer to the following financial statements for Crosby Corporation:

1. Prepare a statement of cash flows for the Crosby Corporation using the general procedures indicated in Table 2-10.
2. Describe the general relationship between net income and net cash flows from operating activities for the firm.
3. Has the buildup in plant and equipment been financed in a satisfactory manner? Briefly discuss.
4. Compute the book value per common share for both 20X1 and 20X2 for the Crosby Corporation.
5. If the market value of a share of common stock is 3.3 times book value for 20X1, what is the firms P/E ratio for 20X2?