The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of capital stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $60,000. $20,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $110,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $130,000. The cost of the goods sold was $80,000. 5. Paid $6,000 in rent on the warehouse building for the month of March. 6. Paid $7,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $80,000 on account for the merchandise purchased in 3. 8. Collected $65,000 from customers on account. 9. Recorded depreciation expense of $2,000 for the month on the equipment. Required: 1. Analyze each transaction by indicating the cash effect and classify each as a financing, investing, and/or operating activity (a transaction can represent more than one type of activity). 2. Prepare a statement of cash flows, using the direct method to present cash flows from operating activities. Assume the cash balance at the beginning of the month was $50,000. The following condensed information was reported by Peabody Toys, Inc., for 2018 and 2017: ($ in 000s) 2018 2017 $5,700 330 $ 4,700 134 Income statement information Net sales Net income Balance sheet information Current assets Property, plant, and equipment (net) Total assets $ 850 1,550 $2,400 $ 800 1,200 $2,000 $ Current liabilities Long-term liabilities Paid-in capital Retained earnings Liabilities and shareholders' equity $1,000 800 400 200 650 800 400 150 $2,400 $2,000 Required: 1. Determine the following ratios for 2018: (Round your percentage answers to 1 decimal place.) 2. Determine the amount of dividends paid to shareholders during 2018. (Enter your answer in dollars.) % % 1a. Profit margin on sales 1b. Return on assets 1c. Return on shareholders' equity 2. Dividends paid % . Service revenue Operating expenses Income before income taxes Income tax expense Net income $ 940,000 720,000 220,000 66,000 $ 154,000 The following balance sheet information also is available: Cash Accounts receivable Accounts payable (operating expenses) Income taxes payable 12/31/18 $315,000 124,000 74,000 12,000 12/31/17 $ 72,000 102,000 62,000 19,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $104,000 in cash. 2. Long-term investments were sold for $52,000 in cash. The original cost of the investments also was $52,000. 3. $82,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $32,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2018 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. 2. Prepare the cash flows from operating activities section of Diversified's 2018 statement of cash flows using the indirect method. The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. 1. Issued 40,000 shares of capital stock in exchange for $400,000 in cash. 2. Purchased equipment at a cost of $60,000. $20,000 cash was paid and a note payable was signed for the balance owed. 3. Purchased inventory on account at a cost of $110,000. The company uses the perpetual inventory system. 4. Credit sales for the month totaled $130,000. The cost of the goods sold was $80,000. 5. Paid $6,000 in rent on the warehouse building for the month of March. 6. Paid $7,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018. 7. Paid $80,000 on account for the merchandise purchased in 3. 8. Collected $65,000 from customers on account. 9. Recorded depreciation expense of $2,000 for the month on the equipment. Required: 1. Analyze each transaction by indicating the cash effect and classify each as a financing, investing, and/or operating activity (a transaction can represent more than one type of activity). 2. Prepare a statement of cash flows, using the direct method to present cash flows from operating activities. Assume the cash balance at the beginning of the month was $50,000. The following condensed information was reported by Peabody Toys, Inc., for 2018 and 2017: ($ in 000s) 2018 2017 $5,700 330 $ 4,700 134 Income statement information Net sales Net income Balance sheet information Current assets Property, plant, and equipment (net) Total assets $ 850 1,550 $2,400 $ 800 1,200 $2,000 $ Current liabilities Long-term liabilities Paid-in capital Retained earnings Liabilities and shareholders' equity $1,000 800 400 200 650 800 400 150 $2,400 $2,000 Required: 1. Determine the following ratios for 2018: (Round your percentage answers to 1 decimal place.) 2. Determine the amount of dividends paid to shareholders during 2018. (Enter your answer in dollars.) % % 1a. Profit margin on sales 1b. Return on assets 1c. Return on shareholders' equity 2. Dividends paid % . Service revenue Operating expenses Income before income taxes Income tax expense Net income $ 940,000 720,000 220,000 66,000 $ 154,000 The following balance sheet information also is available: Cash Accounts receivable Accounts payable (operating expenses) Income taxes payable 12/31/18 $315,000 124,000 74,000 12,000 12/31/17 $ 72,000 102,000 62,000 19,000 In addition, the following transactions took place during the year: 1. Common stock was issued for $104,000 in cash. 2. Long-term investments were sold for $52,000 in cash. The original cost of the investments also was $52,000. 3. $82,000 in cash dividends was paid to shareholders. 4. The company has no outstanding debt, other than those payables listed above. 5. Operating expenses include $32,000 in depreciation expense. Required: 1. Prepare a statement of cash flows for 2018 for the Diversified Portfolio Corporation. Use the direct method for reporting operating activities. 2. Prepare the cash flows from operating activities section of Diversified's 2018 statement of cash flows using the indirect method