Statement of Cash Flows (Indirect Method) The Rural Company's income statement and comparative balance sheets as of December 31 of 2016 and 2015 are shown below: RURAL COMPANY Income Statement For the Year Ended December 31, 2016 Sales Revenue $645,000 Cost of Goods Sold $376,000 Wages Expense 107,000 Depreciation Expense 22,000 Rent Expense 28,000 Income Tax Expense 31,000 564,000 Net Income $81,000 RURAL COMPANY Balance Sheets Dec. 31, 2016 Dec. 31, 2015 Assets Cash Accounts Receivable Inventory Prepaid Rent Plant Assets $41,000 52,000 142,000 14,000 420,000 (127,000) $542,000 $33,000 60,000 116,000 10,000 300,000 (105,000) $414,000 Accumulated Depreciation Total Assets Liabilities and Stockholders' Equity Accounts Payable Wages Payable Income Tax Payable Common Stock Paid-in-Capital in Excess of Par Value Retained Earnings Total Liabilities and Stockholders' Equity $29,000 14,000 7,000 295,000 72,000 125,000 $542,000 $17,000 7,000 8,000 252,000 58,000 72,000 $414,000 Cash dividends of $28,000 were declared and paid during 2016. Plant assets were purchased for cash and additional common stock was issued for cash. Accounts payable relate to merchandise purchases. Required a. Calculate the change in cash that occurred during 2016. b. Prepare a statement of cash flows using the indirect method. C. Compute free cash flow. d. Compute the operating-cash-flow-to-current-liabilities ratio. e. Compute the operating-cash-flows-to-capital-expenditures ratio. a. Change in Cash during 2016 $ b. Use a negative sign with cash outflow answers. RURAL COMPANY Statement of Cash Flows For Year Ended December 31, 2016 Cash Flow from Operating Activities Net Income Add (deduct) items to convert net income to cash basis Depreciation Accounts Receivable $ - A Inventory Prepaid Rent Accounts Payable Wages Payable Income Tax Payable Cash Flow Provided by Operating Activities Cash Flow from Investing Activities Purchase of Plant Assets Cash Flow from Financing Activities Issuance of Common Stock Payment of Dividends Cash Provided by Financing Activities Net Change in Cash Cash at Beginning of Year Cash at End of Year $ c. Free cash flow $ d. Operating-cash-flow-to-current-liabilities ratio. Round answer to two decimal places. e. Operating-cash-flow-to-capital-expenditures ratio. Round answer to two decimal places