Please solve question 2.

Thanks.

ABC Inc Balance Sheets 12/31/2016 12/31/2017 Practice Set2 DLC 1B Prepare a statement of cash flows using the direct or indirect method (your choice) based on the following. Make reasonable assumptions Jas needed ABC Inc Income Statement 12 mos ending 12/31/2017 Assets Current Assets: Cash Accounts Receivable, net Inventory Prepaid expenses Total Current Assets 14,236,295 1,400,000 2,500,000 192,000 18,328,295 19,658,695 1,190,000 2,460,000 201,600 23,510,295 Sales $22,000,000 Property and Equipment Cost of Sales 13,200,000 Machinery and Equipment Computers, Furniture and Fixtu Gross Profit 8,800,000 4.400.000 1.000.000 5.400.000 4,505.000 1,300,000 5.805.000 Less: Accumulated Depreciation Net Property and Equipment (2,900,000) 2,500,000 (4,055,000) 1,750,000 Operating Expense Depreciation Expense 3,300,000 1,155,000 Tax Expense 825,000 Total Assets 20,828,295 25,260,295 Total Expense 5,280,000 Net Income 3,520,000 Liabilities and Shareholders' Equity Current Liabilities: Accounts Payablel Accrued liabilities Dividends Payable Income taxes payable Total current liabilities Other Information: Equipment and computers were purchased for cash 100,000 shares of common stock sold for $10 per share Cash dividends of $150,000 were declared 756,000 1,200,000 120,000 300,000 2,376,000 806,000 1,140,000 132,000 360,000 2,438,000 Long Term Liabilities 2,756,295 2,756,295 Total Liabilities 5,132,295 5,194,295 2 a. Compute Earnings per Share b. PE ratio if the stock price is $36 and the outstanding shares are 1,100,000 in 2017 c. Compute the current ratio Owner's Equity Capital Stock Retained Earnings (Deficit) 11,000,000 4,696,000 12,000,000 8,066,000 Total Sharehe Total Liab & Stckhldrs' Equty *Outstanding common shares 15,696,000 20,828,295 1,000,000.00 20,066,000 25,260,295 1,100,000.00 3 Jan 1. Prepare journal entries for the issuance of $10,000,000, 11%, 10 year semmiannual bonds issued on 1/1 of this year at an effective rate of 12%. Also prepare entries for payment of interest for the first two payments on 7/1 and 1/1 4 XYZ has 300,000 shares of $100 par, 3% cumulative preferred stock and 3,000,000 shares of $1 par common stock There are 400,000 shares of treasury stock (common) Earnings before interest and tax is $6,200,000 Interest expense was $600,000 and the tax rate is 20% The company did not pay a dividend last year and wishes to pay a total of $2,000,000 in dividends How much will each share of preferred and common receive? Retained earnings at the beginning of the year are $90,000,000 What will be the final amount in retained earnings at the end of the year? What are the earnings per common share