Assignment

Complete a Cash Flow Statement and a 1 1.5 page type written recommendation based upon your analysis.Please prepare your written comments in a clear and concise memorandum to Ms. Crosby. (Use a standard memorandum format.) Attach a separate sheet presenting a 2019 Statement of Cash Flows prepared in proper form. (Refer to Exhibits 7.1, 7.2 and 7.3 in the text for reference.)

Crosby Corporation Income Statement For the Year Ended December 31, 2019 2019 Sales Cost of goods sold Gross profit Selling & administrative expenses Depreciation Expense Operating Income Interest expense Net income before taxes Taxes Net income Crosby Corporation Summary of Changes to Retained Earnings For the Year Ended December 31, 2019 $500,000 160,000 (10,000) (50,000) $600,000 120,000 Retained Earnings Balance, 12/31 Add: 2019 Net Income Less: Preferred Stock Dividends P Less: Common Stock Dividends P Assets Cash Retained Earnings Balance, 12/31 Shares Outstanding 12/31/19 Earnings per Share Accounts Receivable (net) Inventory Prepaid Expenses Crossby Corporation Comparative Balance Sheets Total current assets Investments (long-term securities) Plant & equipment Less: Accumulated Depreciation Net plant & equipment Total Assets Liabilities & Stockholders' Equity Accounts payable Notes Payable Accrued expenses Total current liabilites Bond Payable $2,200,000 1,300,000 $900,000 420,000 150,000 $330,000 90,000 $240,000 80,000 $160,000 Total liabilities Preferred Stock, $100 Par Common stock ($1 par value) Capital paid in excess of par Retained earnings Total stockholders' equ Total Liabilities & Stockolders' E $1.42 31-Dec-19 $100,000 350,000 430,000 30,000 910,000 70,000 2,400,000 (1,150,000) 1,250,000 $2,230,000 $440,000.00 400,000 50,000 890,000 120,000 1,010,000 90,000 120,000 410,000 600,000 1,220,000 $2,230,000 31-Dec-18 $70,000 300,000 410,000 50,000 830,000 80,000 2,000,000 (1,000,000) 1,000,000 $1,910,000 $250,000 400,000 70,000 720,000 70,000 790,000 90,000 120,000 410,000 500,000 1,120,000 $1,910,000 Emmanuel College Analyzing Cash Flows ACCT 5112 Crosby Corporation Analyzing Cash Flows Complete a Cash Flow Statement and a 1 1.5 page type written recommendation based upon your analysis. Crosby Corporation Nadine Crosby recently took over the full operations of the Cosby Company after the passing of her aunt. The company manufactures industrial strength shelving. She is an engineer and has worked for many years with the company, most recently as the head of production. Ms. Crosby is very comfortable with her position in manufacturing, but as the newly appointed CEO, she feels it vital for her to better understand the company's financial position. In particular, she wishes to learn more about the cash flow. You have been engaged by her as an outside consultant to help her better understand the 2019 cash flows of Crosby Corporation. To complete the assignment, you must prepare a Statement of Cash Flows for 2019 and then address the following questions in your memo to Ms. Crosby: 1. Why is it so important to understand cash flows? 2. What is the general relationship between net income and net cash flows from operating activities for the firm in 2019? 3. Has the buildup in plant and equipment in 2019 been financed in a satisfactory manner? 4. Compute the book value per common share of stock for 2018 and 2019. Include any other observations you have about the company's Statement of Cash Flows. Assignment Please prepare your written comments in a clear and concise memorandum to Ms. Crosby. (Use a standard memorandum format.) Attach a separate sheet presenting a 2019 Statement of Cash Flows prepared in proper form. (Refer to Exhibits 7.1, 7.2 and 7.3 in the text for reference.)