Question 28 Pronghorn Corporation had the following 2017 income statement. Revenues Expenses $104,000 55,000 $49,000 In 2017, Pronghorn had the following activity in selected accounts. 1,000 98,000 Accounts Receivable 1/1/17 20,000 Write-offs Revenues 104,000 Collections 12/31/17 25,000 Allowance for Doubtful Accounts 1/1/17 Write-offs 1,000 Bad debt expense 12/31/17 1,300 1,900 2,200 (a) Prepare Pronghorn's cash flows from operating activities section of the statement of cash flows using the direct method. Pronghorn Corporation Statement of Cash Flows-Direct Method (Partial) (b) Prepare Pronghorn's cash flows from operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Pronghorn Corporation Statement of Cash Flows-Indirect Method (Partial) Answer each of the questions in the following unrelated situations. (a) The current ratio of a company is 5:1 and its acid-test ratio is 1:1. If the inventories and prepaid items amount to $520,000, what is the amount of current liabilities? Current Liabilities (b) A company had an average inventory last year of $212,000 and its inventory turnover was 6. If sales volume and unit cost remain the same this year as last and inventory turnover is 8 this year, what will average inventory have to be during the current year? (Round answer to 0 decimal places, e.g. 125.) Average Inventory $ (c) A company has current assets of $85,000 (of which $41,000 is inventory and prepaid items) and current liabilities of $41,000. What is the current ratio? What is the acid-test ratio? If the company borrows $14,000 cash from a bank on a 120-day loan, what will its current ratio be? What will the acid-test ratio be? (Round answers to 2 decimal places, e.g. 2.50.) Current Ratio :1 Acid Test Ratio :1 New Current Ratio New Acid Test Ratio :1 (d) A company has current assets of $626,000 and current liabilities of $221,000. The board of directors declares a cash dividend of $166,000. What is the current ratio after the declaration but before payment? What is the current ratio after the payment of the dividend? (Round answers to 2 decimal places, e.g. 2.50.) Current ratio after the declaration but before payment :1 Current ratio after the payment of the dividend :1