Refer to the following financial statements for Crosby Corporation:

CROSBY CORPORATION Income Statement For the Year Ended December 31, 2011
Sales		$	4,240,000
Cost of goods sold			2,810,000
Gross profit		$	1,430,000
Selling and administrative expense			738,000
Depreciation expense			236,000
Operating income		$	456,000
Interest expense			88,000
Earnings before taxes		$	368,000
Taxes			173,000
Earnings after taxes		$	195,000
Preferred stock dividends			10,000
Earnings available to common stockholders		$	185,000
Shares outstanding			150,000
Earnings per share		$	1.23

Statement of Retained Earnings For the Year Ended December 31, 2011
Retained earnings, balance, January 1, 2011	$	320,500
Add: Earnings available to common stockholders, 2011		185,000
Deduct: Cash dividends declared and paid in 2011		181,000
Retained earnings, balance, December 31, 2011	$	324,500

Comparative Balance Sheets For 2010 and 2011
	Year-End 2010	Year-End 2011
Assets
Current assets:
Cash			$	113,000			$	481,600
Accounts receivable (net)				563,000				607,000
Inventory				602,000				664,000
Prepaid expenses				60,900				30,900
Total current assets			$	1,338,900			$	1,783,500
Investments (long-term securities)				91,600				89,600
Gross plant and equipment	$	2,520,000			$	2,640,000
Less: Accumulated depreciation		1,940,000				2,176,000
Net plant and equipment				580,000				464,000
Total assets			$	2,010,500			$	2,337,100
Liabilities and Stockholders Equity
Current liabilities:
Accounts payable			$	342,000			$	581,000
Notes payable				548,000				548,000
Accrued expenses				75,000				51,600
Total current liabilities			$	965,000			$	1,180,600
Long-term liabilities:
Bonds payable, 2011				135,000				242,000
Total liabilities			$	1,100,000			$	1,422,600
Stockholders equity:
Preferred stock, $100 par value			$	90,000			$	90,000
Common stock, $1 par value				150,000				150,000
Capital paid in excess of par				350,000				350,000
Retained earnings				320,500				324,500
Total stockholders equity			$	910,500			$	914,500
Total liabilities and stockholders equity			$	2,010,500			$	2,337,100

a.	Prepare a statement of cash flows for the Crosby Corporation:(Amounts to be deducted should be indicated with a minus sign.)

CROSBY CORPORATION Statement of Cash Flows For the Year Ended December 31, 2011
Cash flows from operating activities:
(Click to select)Net incomeNet loss		$
Adjustments to determine cash flow from operating activities:
(Click to select)Decrease in accrued expensesIncrease in accounts payableDecrease in prepaid expensesIncrease in inventoryDecrease in inventoryIncrease in accounts receivableAdd back depreciationDecrease in accounts receivable	$
(Click to select)Increase in accounts receivableDecrease in prepaid expensesDecrease in accrued expensesIncrease in inventoryDecrease in accounts receivableIncrease in accounts payableDecrease in inventoryAdd back depreciation
(Click to select)Increase in inventoryDecrease in accrued expensesDecrease in prepaid expensesIncrease in accounts receivableDecrease in inventoryDecrease in accounts receivableAdd back depreciationIncrease in accounts payable
(Click to select)Increase in accounts payableIncrease in inventoryDecrease in inventoryAdd back depreciationDecrease in accrued expensesDecrease in prepaid expensesIncrease in accounts receivableDecrease in accounts receivable
(Click to select)Increase in accounts receivableDecrease in accrued expensesDecrease in prepaid expensesIncrease in accounts payableIncrease in inventoryDecrease in accounts receivableAdd back depreciationDecrease in inventory
(Click to select)Decrease in prepaid expensesAdd back depreciationIncrease in accounts receivableIncrease in accounts payableIncrease in inventoryDecrease in accrued expensesDecrease in inventoryDecrease in accounts receivable
Total adjustments
Net cash flows from operating activities		$
Cash flows from investing activities:
(Click to select)Common stock dividends paidPreferred stock dividends paidIncrease in plant and equipmentIncrease in bonds payableDecrease in investmentsIncrease in inventoryDecrease in accrued expensesIncrease in accounts receivable	$
(Click to select)Increase in plant and equipmentPreferred stock dividends paidDecrease in accrued expensesCommon stock dividends paidDecrease in investmentsIncrease in inventoryIncrease in accounts receivableIncrease in bonds payable
Net cash flows from investing activities
Cash flows from financing activities:
(Click to select)Increase in plant and equipmentIncrease in inventoryIncrease in accounts receivableIncrease in bonds payableDecrease in investmentsCommon stock dividends paidDecrease in accrued expensesPreferred stock dividends paid	$
(Click to select)Common stock dividends paidDecrease in accrued expensesIncrease in accounts receivablePreferred stock dividends paidIncrease in plant and equipmentDecrease in investmentsIncrease in bonds payableIncrease in inventory
(Click to select)Increase in plant and equipmentIncrease in inventoryCommon stock dividends paidDecrease in accrued expensesIncrease in accounts receivableIncrease in bonds payablePreferred stock dividends paidDecrease in investments
Net cash flows from financing activities
Net increase (decrease) in cash flows		$

b.	Compute the book value per common share for both 2010 and 2011 for the Crosby Corporation.(Round your answers to 2 decimals places.)

Book value
2010	$
2011	$

c.	If the market value of a share of common stock is 2.5 times book value for 2011, what is the firms P/E ratio for 2011?(Do not round intermediate calculations. Round your final answer to 2 decimal places.)

P/E ratio

times

References