Use the following data to calculate the liquidity and profitability ratios listed below. Average common shares 10,000 Current liabilities $100,000 Capital expenditures $20,000 Net income $ 21,000 Cash provided by operations $28,000 Net sales $150,000 Dividends paid $5,000 Total liabilities $105,000 Current assets $150,000 Total assets $175,000 Instructions: Compute the following: (a) Current ratio. (b) Working capital. (c) Earnings per share. (d) Debt to total assets ratio. (e) Free Cash Flow To earn full credit, you must state the formula you are using, show your computations and explain your findings. (Points: 25) 2. (TCO B & E) The following items are taken from the financial statements of Tracy Company for 2010: Accounts Payable $ 15,000 Accounts Receivable 11,000 Accumulated DepreciationVideo Equipment 28,000 Advertising Expense 21,000 Cash 24,000 Common Stock 90,000 Depreciation Expense 12,000 Dividends 15,000 Insurance Expense 3,000 Note Payable (due 2013) 70,000 Prepaid Insurance 6,000 Rent Expense 17,000 Retained Earnings (beginning) 12,000 Salaries Expense 34,000 Salaries Payable 3,000 Service Revenue 145,000 Supplies 4,000 Supplies Expense 6,000 Video Equipment 210,000 Instructions (a) Calculate the net income. (b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2010. (Points: 25) Bentley Company reported net income of $320,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $22,000 $15,000 Accounts receivable 17,000 32,000 Inventories 55,000 65,000 Prepaid expenses 7,500 5,000 Accounts payable 14,000 18,000 Income taxes payable 600 1,200 Instructions Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method. The following items are taken from the financial statements of Tracy Company for 2010: Accounts Payable $ 15,000 Accounts Receivable 11,000 Accumulated DepreciationVideo Equipment 28,000 Advertising Expense 21,000 Cash 24,000 Common Stock 90,000 Depreciation Expense 12,000 Dividends 15,000 Insurance Expense 3,000 Note Payable (due 2013) 70,000 Prepaid Insurance 6,000 Rent Expense 17,000 Retained Earnings (beginning) 12,000 Salaries Expense 34,000 Salaries Payable 3,000 Service Revenue 145,000 Supplies 4,000 Supplies Expense 6,000 Video Equipment 210,000 Instructions (a) Calculate the net income. (b) Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2010. Bentley Company reported net income of $320,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $22,000 $15,000 Accounts receivable 17,000 32,000 Inventories 55,000 65,000 Prepaid expenses 7,500 5,000 Accounts payable 14,000 18,000 Income taxes payable 600 1,200 Instructions Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method