Twin Oak Corp has the following comparative balance sheet data.

Exercise #1 Cash flows F+ Examine the listed business activities and decide if each is to be classified as a: O Cash flow from operating activity I Cash flow from investing activity F Cash flow from financing activity NC Non-cash investing/financing activity +/inflows and outflows Example isue bonds payable (a) Issue common stock for land (b) Issue common stock for cash (c) Pay interest on loan (d) Sell goods for cash (e) Pay employee salaries (f) Pay dividends to common shareholders (g) Receive dividend on an investment (h) Obtain proceeds of long-term loan (i) Acquire treasury shares (j) Purchase land for cash (k) Buy inventory for resale Exercise #2 Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of $1,000,000; gross profit of $520,000; selling and administrative costs of $340,000; interest expense of $20,000; and income taxes of $60,000. The selling and administrative expenses included $25,000 for depreciation. No equipment was sold during the year. Equipment purchases were made with cash. Prepaid insurance included in the balance sheet related to administrative costs. All accounts payable included in the balance sheet relate to inventory purchases. The change in retained earnings is attributable to net income and dividends. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash. Using the indirect approach, prepare a statement of cash flows for Ozark for the year ending December 31, 20X5. C OZARK CORPORATION Balance Sheet December 31, 20X4 and 20X5 Assets Cash Accounts receivable Inventories Prepaid insurance Land Building and equipment Less: Accumulated depreciati Total assets Liabilities Accounts payable Interest payable Income taxes payable Stockholders' equity Common stock Paid in capital in excess of par Retained earnings Total liabilities and equity 20X5 458,700 199,250 248,600 13,000 250,000 1,500,000 (205,000) 2,464,550 20X4 Change 471,450 (12,750) 171,500 278,800 11,000 ### 1,300,000 (180,000) 2,302,750 85,700 10,500 22,000 93,400 15,000 8,000 710,000 990,000 646,350 2,464,550 700,000 900,000 586,350 2,302,750 revealed sales of erest expense of ment was sold ded in the balance eet relate to nd dividends. The ares for cash. ending December 31, 20X5. Comparative balance sheets for Ozark follow. OZARK CORPORATION Statement of Cash Flows (Indirect Approach) For the Year Ending December 31, 20X5 Cash flows from operating activities: Net income $ Add (deduct) noncash effects on operating income Depreciation expense $ Increase in accounts receivable Decrease in inventory Increase in prepaid insurance Decrease in accounts payable Decrease in interest payble Increase in income taxes payabl Net cash provided by operating activ$ Cash flows from investing activities: Purchase of equipment $ Net cash used by investing activities - Cash flows from financing activities: Proceeds from issuing stock $ Dividends on common Net cash provided by financing activ Net decrease in cash $ Cash balance at January 1, 20X5 Cash balance at December 31, 20X5 $ - proach) 20X5 Exercise #3 Identify where each of the following items would be reported in the financial statements. CA 1 Cash example 2 Loss on sale of investments in stock. 3 Unrealized gain on non-trading securities. 4 Fair value adjustmenttrading 5 Interest earned on investments in bonds. 6 Unrealized loss on trading securities 7 Bonds payable 8 Accumulated deprgreater than one year 9 Receivables due in one month 10 Payables 11 Interest earned on investments in bonds. 12 Patent 13 Investments in bonds. 14 Unrealized gain on Available for sale securities 15 Copyright 16 Building 17 Mortgage 18 Note payable due in one month Balance sheet Income statement e financial statements. Balance sheet CA CL INV LTL PPE SE IA Income statement ORG OEL OCI Current assets Current liabilities Investments Long-term liabilities Property, plant, and equipment Stockholders' equity Intangible assets Other revenues and gains Other expenses and losses Other comprehensive income Exercise #4 Presented below are long-term liability items for Suarez Company at December 31, 2014. Prepare the long-term liabilities section of the balance sheet for Suarez Company. Bonds payable, due 2016 $500,000 Mortgage liability due in one year $45,000 560,000 total Notes payable, due 2019 80,000 Discount on bonds payable 42,000 ny at December 31, 2014. Exercise #5 Twin Oak Corp has the following comparative balance sheet data. Cash Receivables (net) Prepaid Insurance LT Investments Plant and equipment (net) Current liabilities Long-term debt Common stock, $10 par Retained Earnings Twin Oak Corp Balance Sheet December 31 2014 $ 25,000 50,000 90,000 75,000 400,000 $640,000 $ 70,000 80,000 345,000 145,000 $640,000 Twin Oak Corp Income Statement For the Year Ended December 31 2014 Sales revenue $740,000 Less: Sales returns and allowances 40,000 Net sales 700,000 Cost of goods sold 420,000 Gross profit 280,000 Operating expenses (including income ta 238,000 Net income $42,000 Additional information: The market price of the common stock was: $5.50 $7.25 $8.15 for 2012 for 2013 for 2014 All dividends are paid in cash Compute for 2013 1 Profit margin 2 gross profit rate 3 A/R turnover 4 Inv turnover 5 EPS 6 PE ratio 1 2 3 4 5 6 7 7 debt to total assets 8 return on common equity 9 current ratio 10 quick ratio Based on these ratios discuss the financial position of Twin Oak Corp 8 9 10 k Corp Sheet er 31 $ $ 2013 20,000 $ 45,000 95,000 70,000 370,000 $600,000 75,000 $ 85,000 315,000 125,000 $600,000 mber 31 2013 $700,000 60,000 640,000 400,000 240,000 208,000 $32,000 12 13 14 Compute for 2014 Profit margin gross profit rate A/R turnover Inv turnover EPS PE ratio debt to total assets 2012 18,000 48,000 64,000 45,000 358,000 $533,000 70,000 50,000 300,000 113,000 $533,000 outstanding shares average 33,000 shares return on common equity current ratio quick ratio