Problem II: Presented below is financial information of the Martin Corporation for 20x7. Gain on the sale of investments 160,000 Net sales 45,000,000 Cost of goods sold 31,000,000 Loss on disposal of wholesale division 670,000 Interest revenue 105,000 Loss on operations of wholesale division 690,000 Selling and administrative expenses 8,200,000 Dividends declared on common stock 340,000 Write off of goodwill 780,000 Dividends declared on preferred stock 120,000 Effective tax rate on all items is 34% Martin Corporation decided to discontinue its wholesale operations and to retain their manufacturing operations. On July 1, Martin sold the wholesale operations. During 20x7, there were 800,000 shares of common stock outstanding all year. (Show calculations including providing labels.) Instructions Compute each of the following. 1. Income from operations (+) Sales 45,000,000 (+) Cost of Goods Sold 31,000,000 (-) Sell & Ad Exp 8,200,000 Income from Operations $5,800.000 2. Income before income tax 3. Income from continuing operations 4. Net income 5. Earnings per share Problem III: Statement of Cash Flows (16 pts.) End of Year Beginning of Year Net Change $ $ Cash Accounts Receivable Trading Securities Inventories 37,000 20,000 5,000 (9.000) 155,000 164,000 Land Equipment Accumulated Depreciation Total (35.000) 70,000 (27.000) 87.000 812,000 545,000 $ $ Accounts Payable Bonds Payable Common Stock (51 par) Retained Earnings Total (13.000) (50.000) 50.000 80.000 87,000 $ 612,000 $ 545,000 Notes: 1. Income of $120,000 was recorded and dividends of $40,000 were declared and paid. 2. Land with a book value of $35,000 was sold for $40,000. 3. 50,000 shares of $1 par stock were issued for $50,000. 4. The company then used the $50,000 to retire $50,000 of the bonds payable. Required: Prepare a draft of a Statement of Cash Flows