Presented below are the income statement and balance sheet of Windsor, Inc:

Income Statement - 2020

Sales$100

Cost of goods sold40

Gross profit60

Operating expense7

Interest expense4

Taxes6

Gain on sale of equipment4

Loss on sale of investment(1)

Total expenses20

Net income40

Balance Sheet20202019

Cash$10$2

Accounts receivable1210

Inventory1420

Prepaid rent64

Investments610

Equipment2015

Accumulated depreciation(8)(6)

Total assets6055

Accounts Payable43

Taxes payable310

Bonds payable84

Common stock3228

Retained earnings1310

Total6055CONTINUED

Additional Information

1. Sold investment that cost $4 for $3.
2. Average shares of stock outstanding was $10.
3. Market price of a share of common stock was $30.
4. Equipment costing $5 with accumulated depreciation of $3 was sold for $6.

Required:make a statement of cash flows using the direct method for 2020.

PROBLEM 2: Using the information from Problem 1, calculate the following ratios for 2020:

1. Current ratio.
2. Inventory turnover
3. Average collection period.
4. Times interest earned.
5. Debt to equity ratio.
6. Price earnings ratio.
7. Return on equity.

PROBLEM 3:Prior Corp. produces chairs. It requires 4 feet of wood per chair. Sales are estimated to be:

2020 Units

Jan.10,000 units

Feb.12,000

March14,000

April8,000

Chairs on hand at December 31, 2019 were 900 chairs. The corporation wants to maintain an inventory of 10% of the following months' sales in its ending inventory. Prior Corp. had an inventory of wood at December 31, 2019 of 5,000 feet, and it desires to maintain ending inventories of 5% of the following months production needs.Required: make materials budget for January and February.