Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATION Income Statement For the Year Ended December 31, 20x2 Sales $ 4,210,000 Cost of goods sold 2,620,000 Gross profit $ 1,590,000 Selling and administrative expense 703,000 Depreciation expense 317,000 Operating income $ 570,000 Interest expense 82,000 Earnings before taxes $ 488,000 Taxes 231,000 Earnings after taxes $ 257,000 Preferred stock dividends 10,000 Earnings available to common stockholders $ 247,000 Shares outstanding 150,000 Earnings per share $ 1.65 Statement of Retained Earnings For the Year Ended December 31, 20X2 Retained earnings, balance, January 1, 20X2 Add: Earnings available to common stockholders, 20X2 Deduct: Cash dividends declared and paid in 20X2 Retained earnings, balance, December 31, 20X2 $978,900 247,000 235,000 $990,900 Year-End 20X2 $ 103, 400 570,000 733,000 34,400 $1,440,800 81,700 $ 2,830,000 1,417,000 1,413,000 $2,935,500 Comparative Balance Sheets For 20xi and 20x2 Year-End 20X1 Assets Current assets: Cash $ 110,000 Accounts receivable (net) 556,000 Inventory 683,000 Prepaid expenses 69,500 Total current assets $1,418,500 Investments (long-term securities) 95,600 Gross plant and equipment $ 2, 290,000 Less: Accumulated depreciation 1,100,000 Net plant and equipment 1,190,000 Total assets $2,704, 100 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 386,000 Notes payable 500,000 Accrued expenses 77,200 Total current liabilities $ 963,200 Long-term liabilities: Bonds payable, 20x2 172,000 Total liabilities $1,135, 200 Stockholders' equity: Preferred stock, $100 par value $ 90,000 Common stock, $1 par value 150,000 Capital paid in excess of par 350,000 Retained earnings 978,900 Total stockholders' equity $1,568,900 Total liabilities and stockholders' equity $2,704,100 S 582,000 500,000 51,600 $1,133, 600 221,000 $1,354,600 S 90,000 150,000 350,000 990,900 $1,580,900 $ 2,935,500 a. Prepare a statement of cash flows for the Crosby Corporation: (Amounts to be deducted should be indicated with parentheses or a minus sign.) CROSBY CORPORATION Statement of Cash Flows For the Year Ended December 31, 20X2 Cash flows from operating activities: Adjustments to determine cashflow from operating activities: Total adjustments Net cash flows from operating activities Cash flows from investing activities: $ $ 0 0 $ 0 Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities $ 0 b. Compute the book value per common share for both 20X1 and 20X2 for the Crosby Corporation. (Round your answers to 2 decimals places.) Book value 20X1 20X2 c. If the market value of a share of common stock is 3.4 times book value for 20X2, what is the firm's P/E ratio for 20x2? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) P/E ratio times
