Refer to the following financial statements for Crosby Corporation:

Sales..........................................................................................         $2,200,000

Cost of goods sold....................................................................          1,300,000

     Gross profits.......................................................................               900,000

Selling and administrative expense...........................................         420,000

Depreciation expense................................................................           150,000

     Operating income................................................................             330,000

Interest expense........................................................................               90,000

     Earnings before taxes..........................................................             240,000

Taxes.........................................................................................                 80,000

Earnings after taxes............................................................                   160,000

Preferred stock dividends............................................................           10,000

Earnings available to common stockholders.............................      $ 150,000

Shares outstanding....................................................................             120,000

Earnings per share.....................................................................                 $ 1.25

                        Statement of Retained Earnings

                 For the Year Ended December 31, 2011

Retained earnings, balance, January 1, 2011............................         $500,000

Add: Earnings available to common stockholders, 2011......             150,000

Deduct: Cash dividends declared and paid in 2011.............                 50,000

Retained earnings, balance, December 31, 2011......................       $600,000

a) Prepare a statement of cash flows for the Crosby Corporation using the general procedures indicated in Table 2–10.
b) Describe the general relationship between net income and net cash flows from operating activities for the firm.
c) Has the buildup in plant and equipment been financed in a satisfactory manner? Briefly discuss.
d) Compute the book value per common share for both 2010 and 2011 for the Crosby Corporation.
e) If the market value of a share of common stock is 3.3 times book value for 2004, what is the firm’s P/E ratio for 2011?

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Comparative Balance Sheets For 2010 and 2011 Year-End Year-End Assets 2010 2011 Current assets: Cash. S 70,000 S100,000 Accounts receivable (net).. 300,000 350,000 Inventory. 410,000 430,000 Prepaid expenses . 50,000 30,000 Total current assets 830,000 910,000 Investments (long-term securities). 80,000 70,000 Plant and equipment.. 2,000,000 2,400,000 Less: Accumulated depreciation 1,000,000 1,150,000 Net plant and equipment. 1,000,000 1,250,000 Total assets $1.910.000 $2.230.000