Homework Instructions: Answer the following questions: 1. Cash Flows Concept Use Table 3.1 and 3.3 to compute the cash flow from assets for 2014. 2. Standardized Financial Statements a. Use Table 3.1 to construct common-sized balance sheets for Prufrock Corporation in 2014. b. Use Table 3.3 to Construct common-sized income statements for Prufrock Corporation in 2014. Prufrock Corporation Balance Sheets TABLE 3.1 2014 $ 98 188 422 $ 708 PRUFROCK CORPORATION Balance Sheets as of December 31, 2013 and 2014 ($ in millions) 2013 Assets Current assets Cash $ 84 Accounts receivable 165 Inventory 393 Total $ 642 Fixed assets Net plant and equipment $2.731 Total assets $3,373 Liabilities and Owners' Equity Current liabilities Accounts payable $ 312 Notes payable 231 Total $ 543 Long-term debt $ 531 Owners' equity Common stock and paid-in surplus $ 500 Retained earnings 1.799 Total $2,299 Total liabilities and owners' equity $3,373 $2,880 $3,588 $ 344 196 $ 540 $ 457 $ 550 2,041 $2,591 $3,588 Prufrock Corporation Income Statement TABLE 3.3 PRUFROCK CORPORATION 2014 Income Statement ($ in millions) Sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable income Taxes (34%) Net income Dividends Addition to retained earnings $2,311 1,344 276 $ 691 141 $ 550 187 S 363 $121 242