The comparative financial statements of the Summer Company are as follows.
	The market price of the Summer Company common stock was $36 on
	December 31, 2016 and $11.20 on December 31, 2017.
				Summer Company
				Comparative Balance Sheet
				December 31, 2017, 2016 and 2015
			ASSETS
				2017	2016	2015
Current Assets
Cash				$176,200	$253,100	$26,500
Accounts Receivable				238,850	31,850	67,350
Merchandise Inventory				62,500	42,500	130,000
Prepaid Expenses				700	1,700	2,200
Total Current Assets				$478,250	$329,150	$226,050
Plant Assets				696,100	726,100	786,100
Less: Accumulated Depreciation				(70,000)	(60,000)	(80,000)
Plant Assets (net)				626,100	666,100	706,100
Total Assets				$1,104,350	$995,250	$932,150
		Liabilities and Stockholder's Equity
Current Liabilites
Accounts Payable				$55,000	$30,000	$60,000
Accrued Liabilities				1,000	8,000	12,000
Dividends Payable				0	10,000	2,000
Total Current Liabilities				$56,000	$48,000	$74,000
Long-Term Liabilities
Mortgage Note Payable				$9,000	$29,000	$49,000
Bonds Payable				240,000	340,000	290,000
Less: Discount on Bonds Payable				(4,500)	(5,500)	(4,500)
Total Long-Term Liabilities				$244,500	$363,500	$334,500
Total Liabilities				$300,500	$411,500	$408,500
Stockholders' Equity
Common Stock, $10 Par				$411,900	$311,900	$311,900
Paid in Capital in Excess of Par				162,350	72,350	72,350
Retained Earnings				236,600	209,500	149,400
Less: Treasury Stock				(7,000)	(10,000)	(10,000)
Total Stockholders' Equity				$803,850	$583,750	$523,650
Total Liabilities and
Stockholders' Equity				$1,104,350	$995,250	$932,150
				The Summer Company
				Retained Earnings Statement
			For the years Ended December 31, 2011 and 2010
				2017	2016
Retained Earnings. Jan. 1,				$209,500	$149,400
Add: Net Income				27,100	70,100
Less: Dividends Declared					(10,000)
Retained Earnings Dec. 31				$236,600	$209,500
				The Summer Company
				Income Statement
			For the years ended December 31, 2011 and 2010
				2017	2016
Sales				$260,000	$521,000
less: Cost of Merchandise Sold				200,000	387,500
Gross Profit				60,000	133,500
less: Operating Expenses; excluding Depreciation				11,000	8,500
Depreciation Expense				20,000	20,000
Income from Operations				$29,000	$105,000
Add: Other Income: Gain on sale of equipment				10,000	0
Less: Other Expenses: Loss on sale of equipment					8,000
				$39,000	$97,000
Less: Interest Expense				3,900	5,900
Income before Income Tax				$35,100	$91,100
Less: Income Tax expense				8,000	21,000
				$27,100	$70,100
			The Summer Company
			Statement of Cash Flows
		For the year ended December 31, 2016
Cash Flow From Operating Activities:
Net Income						$70,100
Add:	Net decrease in Accounts Receivable				$35,500
	Net decrease in Merchandise Inventory				87,500
	Net decrease in Prepaid Expenses				500
	Loss on Sale of Plant Assets			(1)	8,000
	Depreciation Expense			(1)	20,000
	Amortization of Bond Discount			(2)	1,000	152,500
						222,600
Deduct:	Decrease in Accounts Payable				$30,000
	Decrease in Accrued Liabilities				4,000	34,000
	Cash Flow From Operating Activities					188,600
	Cash Flow from Investing Activities:
	Sale of Plant Assets for cash			(1)	12,000
	Cash Flow from Investing Activities					12,000
	Cash Flow from Financing Activities
	Issued Bonds for cash			(2)	48,000
Deduct:	Cash Dividends Paid			2,000
	Mortgage paid			20,000	22,000
	Cash Flow from Financing Activities					26,000
	Net Increase in Cash					226,600
	1/1/2016 Cash Balance					26,500
	12/31/2016 Cash Balance					253,100
(1)	Sold Plant Assets with a book value of $20,000.
(2)	Issued bonds for $48,000. Face Value $50,000.
The following transactions occurred during 2017 to assist you in preparing the Statement
of Cash Flows for 2017.
A. Dividends were declared in 2016 and paid 2017.
B. Purchased Treasury Stock for $10,000 on 1/1/2017.
C. Sold Treasury Stock receiving cash.
D. Sold Plant Assets, receiving cash. The net book value of the plant asset was $20,000.
E. Paid off a portion of the mortg			age note.
F. Retired bonds at their maturity value.
G. Amortized the Discount on Bonds Payable.
H. Issued common stock, receiving cash.
Required:	1. Prepare the Statement of Cash Flows for the year ended December 31, 2017.
	(Show all required computations).
	Assume that your manager, who has a marketing background ask you the
	following questions 2-5, after reviewing the Statement of Cash Flows for 2017
	and 2016.
	As you can see from the premise of the questions, that your manager does not
	have a basic understanding of the statement of cash flows. Take that into
	consideration when answering questions 2-5.
	2. "How can Depreciation be a cash flow"?
	3. "How can a gain on the sale of non-current assets be a deduction from Net
	Income in determining the Cash Flow from Operating Activities?
	4. "How can a Loss on the Sale of non current assets be be an
	addition to Net Income in determining Cash Flow from Operating Activities?
	5. "Why does the bank need a Statement of Cash Flows anyway? They can
	compute the increase or decrease in cash flow from the Balance Sheet for the
	last two years"?
	6. Prepare the following financial statement analysis for the 2017 and 2016.
	Define each measure and whether the Summer Company did better or worse
	and why?
	A. Current ratio.
	B. Quick ratio.
	C. Rate of Return on Total Assets.
	D. Rate of Return on Common Stockholders' Equity.
	E. Earnings Per Share on Common Sock. (When computing the earnings per
	share assume there is no Treasury Stock). Use the outstanding shares as of
	12/31/2017 for 2017 and the outstanding shares as of 12/31/ 2016 for 2016. Do
	not use the weighted average outstanding shares.
	F. Accounts Receivable Turnover. Assume all Sales are on account.
	G. Average collection period. Assume all Sales are on account.
	H. Inventory Turnover.
	I. Debt to equity ratio
	J. Times Interest Earned Ratio.
	K. Price Earnings Ratio.
	L. Operating Cash Flow to current liability ratio
	M. Vertical analysis for the Income Statement for 2017 and 2016.
	Below is an example of how you should present the information.
				2011		2010
Working Capital:
Current Assets				$478,250		$329,150
Current Liabilities				56,000		48,000
Net Working Capital				422,250		281,150
			Strength or Weakness
Working Capital measures the ability of a company to meet it's short-term obligations with
current assets. In 2011 Summer is performing much better since they have more current
assets available to meet their short-term obligations.
	7. From your analysis, summarize the major strenths and weaknesses comparing
	Summer's 2017 and 2016 performance. Summarize part 6 A through M.