tatement of Cash Flows $($Direct 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 $31,000564,000$

Net Income $$81,000$

RURAL COMPANY

Balance Sheets

Dec. $31,2016$ Dec. $31,2015$

Assets

Cash $$41,000$ $$33,000$

Accounts Receivable $52,00060,000$

Inventory $142,000116,000$

Prepaid Rent $14,00010,000$

Plant Assets $420,000300,000$

Accumulated Depreciation $(127,000)(105,000)$

Total Assets $$542,000$ $$414,000$

Liabilities and Stockholders$$ Equity

Accounts Payable $$29,000$ $$17,000$

Wages Payable $14,0007,000$

Income Tax Payable $7,0008,000$

Common Stock $295,000252,000$

Paid$-$In$-$Capital in Excess of Par Value $72,00058,000$

Retained Earnings $125,00072,000$

Total Liabilities and Stockholders$$ Equity $$542,000$ $$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$.$ Compute the change in cash that occurred during $2016.$

b$.$ Prepare a statement of cash flows using the direct method.

c$.$ Compute free cash flow.

d$.$ Compute the operating$$cash$$flow$$to$$current$$liabilities ratio.

e$.$ Compute the operating$$cash$$flow$$to$$capital$$expenditures ratio.The Rural Company's income statement and comparative balance sheets as of December $31$ of $2016$ and $2015$ are shown below:

Required

$.$ Compute the change in cash that occurred during $2016.$

Prepare a statement of cash flows using the direct method.

Compute free cash flow.

Compute the operating$-$cash$-$flow$-$to$-$current$-$liabilities ratio.

Compute the operating$-$cash$-$flow$-$to$-$capital$-$expenditures ratio.

Change in Cash during $2016$$

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

Cash Flow from Investing Activities

Purchase of Plant Assets

Cash Flow from Financing Activities