PLEASE HELP WITH PART D. PLEASE SHOW THE CALCULATIONS.

Rainbow Company's income statement and comparative balance sheets follow.

RAINBOW COMPANY Income Statement For Year Ended December 31, 2016
	Sales		$1,500,000
	Dividend Income		30,000
	Total Revenue		1,530,000
	Cost of Goods Sold	$880,000
	Wages and Other Operating Expenses	260,000
	Depreciation Expense	78,000
	Patent Amortization Expense	14,000
	Interest Expense	26,000
	Income Tax Expense	88,000
	Loss on Sale of Equipment	10,000
	Gain on Sale of Investments	(6,000)	1,350,000
	Net Income		$180,000

RAINBOW COMPANY Balance Sheets
		December 31, 2016	December 31, 2015
	Assets
	Cash and Cash Equivalents	$48,000	$50,000
	Accounts Receivable	80,000	60,000
	Inventory	206,000	154,000
	Prepaid Expenses	20,000	12,000
	Long-Term Investments	-	114,000
	Land	380,000	200,000
	Buildings	890,000	700,000
	Accumulated Depreciation-Buildings	(182,000)	(150,000)
	Equipment	358,000	450,000
	Accumulated depreciation-Equipment	(84,000)	(92,000)
	Patents	100,000	64,000
	Total Assets	$1,816,000	$1,562,000
	Liabilities and Stockholders Equity
	Accounts Payable	$50,000	$32,000
	Interest Payable	12,000	10,000
	Income Tax Payable	16,000	20,000
	Bonds Payable	310,000	250,000
	Preferred Stock ($100 par value)	200,000	150,000
	Common Stock ($5 par value)	758,000	728,000
	Paid-in capital in excess of par value-Common	266,000	248,000
	Retained Earnings	204,000	124,000
	Total Liabilities and Stockholders Equity	$1,816,000	$1,562,000

During 2016, the following transactions and events occurred:

1		Sold long-term investments costing $114,000 for $120,000 cash.
2		Purchased land for cash.
3		Capitalized an expenditure made to improve the building.
4		Sold equipment for $28,000 cash that originally cost $92,000 and had $54,000 accumulated depreciation.
5		Issued bonds payable at face value for cash.
6		Acquired a patent with a fair value of $50,000 by issuing 500 shares of preferred stock at par value.
7		Declared and paid a $100,000 cash dividend.
8		Issued 6,000 shares of common stock for cash at $8 per share.
9		Recorded depreciation of $32,000 on buildings and $46,000 on equipment.

Required

a. Compute the change in cash and cash equivalents that occurred during 2016. -2000

b. Prepare a 2016 statement of cash flows using the indirect method.

RAINBOW COMPANY STATEMENT OF CASH FLOWS FOR YEAR ENDED DECEMBER 31, 2016
Cash flows from operating activities
Net Income	180,000
Add (deduct) items to convert net income to cash basis
Depreciation	78000
Patent amortization	14000
Loss on sale of equipment	10000
Gain on sale of investments	(6000)
Accounts receivable increase	(20,000)
Inventory increase	(52,000)
Prepaid expenses increase	(8,000)
Accounts payable increase	18,000
Interest payable increase	2,000
Income tax payable decrease	(4,000)
Net cash provided by operating activities		212,000
Cash flows from investing activities
Sale of Investments	120,000
Purchase of land	(180,000)
Improvements to building	(190,000)
Sale of equipment	28,000
Net cash used by investing activities		(222,000)
Cash flows from financing activities
Issuance of bonds payable	60,000
Issuance of common stock	40,000
Payment of dividends	(100,000)
Net cash provided by financing activities		8,000
Net change in Cash		(2,000)
Beginning Cash Balance		50,000
Ending cash balance		48,000

c. Prepare separate schedules showing (1) cash paid for interest and for income taxes and (2) noncash investing and financing transactions.

(1) Supplemental Cash Flow Disclosures
Cash paid for interest	24,000
Cash paid for income taxes	92,000
(2) Schedule of noncash investing and financing activities:
Issuance of preferred stock to acquire patent	50,000

d. Compute its (1) operating cash flow to current liabilities ratio, (2) operating cash flow to capital expenditures ratio, and (3) free cash flow. Round your answers to (1) and (2) to two decimal places.

(1)	Operating cash flow to current liabilities ratio	Answer
(2)	Operating cash flow to capital expenditures ratio	Answer
(3)	Free cash flow	Answer