I watched a few videos, and searched online. I am unable to find anyway to figur

ID: 2675184 • Letter: I

Question

I watched a few videos, and searched online. I am unable to find anyway to figure this out. I understand what it is asking, but I am unable to compute the numbers correctly. Please help.

JETER CORPORATION
Income Statement
For the Year Ended December 31, 2010
Sales $ 3,300,000
Cost of goods sold 1,950,000

Gross profits 1,350,000
Selling and administrative expense 650,000
Depreciation expense 230,000

Operating income 470,000
Interest expense 80,000

Earnings before taxes 390,000
Taxes 140,000

Earnings after taxes 250,000
Preferred stock dividends 10,000

Earnings available to common stockholders $ 240,000
Shares outstanding 150,000
Earnings per share $ 1.60

Statement of Retained Earnings
For the Year Ended December 31, 2010
Retained earnings, balance, January 1, 2010 $ 800,000
Add: Earnings available to common stockholders, 2010 240,000
Deduct: Cash dividends declared and paid in 2010 140,000
Retained earnings, balance, December 31, 2010 $ 900,000

Comparative Balance Sheets
For 2009 and 2010
Year-End
2009 Year-End
2010
Assets
Current assets:
Cash $ 100,000 $ 120,000
Accounts receivable (net) 500,000 510,000
Inventory 610,000 640,000
Prepaid expenses 60,000 30,000

Total current assets 1,270,000 1,300,000
Investments (long-term securities) 90,000 80,000
Plant and equipment 2,000,000 2,600,000
Less: Accumulated depreciation 1,000,000 1,230,000

Net plant and equipment 1,000,000 1,370,000

Total assets $ 2,360,000 $ 2,750,000

Liabilities and Stockholders

Explanation / Answer

Cash flows from operating activities:

Net income (earnings after taxes)..........................................

   Adjustments to determine cash
      flow from operating activities:
      Add back depreciation.......................................................

Increase in inventory...........................................................

Decrease in prepaid expenses.............................................

Increase in accounts payable...............................................

Decrease in accrued expenses............................................. Total adjustments...................................................................

Net cash flows from operating
activities..................................................................................

Cash flows from investing activities:

Decrease in investments.........................................................

Increase in plant and equipment............................................

Net Cash flows from investing activities...............................

Cash flows from financing activities:

Increase in bonds payable......................................................

Preferred stock dividends paid..............................................

Common stock dividends paid..............................................

Net cash flows from financing..............................................

Net increase (decrease) in cash flows.......................................

$230,000

(10,000)

(30,000)

30,000

250,000

(20,000)

10,000

(600,000)

60,000

(10,000) (140,000)

$250,000

$Number

(590,000)

(90,000)

$20,000