Preparing a Statement of Cash Flows $($Indirect Method$)$

Rainbow Company's income statement and comparative balance sheets follow.

$\backslash$table$[[\backslash$table$[[$RAINBOW COMPANY$],[$Income Statement$]]],[$For Year Ended December $31,$ Year $8,,],[$Sales$,,$$$600,000],[$Dividend income,,$12,000],[$Total revenue,$$352,000,612,000],[$Cost of goods sold,$31,200,],[$Wages and other operating expenses,$104,000,],[$Depreciation expense,$5,600,],[$Patent amortization expense,$10,400,],[$Interest expense,$35,200,],[$Income tax expense,$4,000,],[$Loss on sale of equipment,$(2,400),540,000],[$Gain on sale of investments,,$$72,000],[$Net income,,$]]$

$\backslash$table$[[\backslash$table$[[$RAINBOW COMPANY$],[$Balance Sheets$]]],[,\backslash$table$[[$Dec$.],[31,$Year$],[8]],],[$Assets$],[$Cash and cash equivalents,$$15,200,$$$20,000],[$Accounts receivable,$32,000,24,000],[$Inventory$,82,400,61,600],[$Prepaid expenses,$8,000,4,800],[$Long$-$term investments,$,45,600],[$Land$,152,000,80,000],[$Buildings$,356,000,280,000],[$Accumulated depreciation$-$buildings,$(72,800),(60,000)],[$Equipment$,143,200,180,000],[$Accumulated depreciation$-$equipment,$(33,600),(36,800)],[$Patents$,40,000,25,600],[$Total assets,$$722,400,$$ $624,800],[$Liabilities and Stockholders' Equity$],[$Accounts payable,$$18,600,$$$12,800],[$Interest payable,$4,800,4,000],[$Income tax payable,$6,400,8,000],[$Bonds payable,$121,400,100,000],[$Preferred stock $($ $$100$ par value$),80,000,60,000],[$Common stock $($ $$5$ par value$),303,200,291,200],[$Paid$-$in capital in excess of par value$-$common,$106,400,99,200],[$Retained earnings,$81,600,49,600],[$Total liabilities and equity,$$722,400,$$$624,800]]$

During Year $8,$ the following transactions and events occurred:

Sold long$-$term investments costing $$45,600$ for $$48,000$ cash.

Purchased land for cash.

Capitalized an expenditure made to improve the building.

Sold equipment for $$11,200$ cash that originally cost $$36,800$ and had $$21,600$ accumulated depreciation.

Issued bonds payable at face value for cash.

Acquired a patent with a fair value of $$20,000$ by issuing $200$ shares of preferred stock at par value.

Declared and paid a $$40,000$ cash dividend.

Issued $2,400$ shares of common stock for cash at $$8\mathrm{.}00$ per share.

Recorded depreciation of $$12,800$ on buildings and $$18,400$ on equipment. a$.$ Compute the change in cash and cash equivalents that occurred during Year $8.$

Note: Use a negative sign with your answer to indicate a decrease in cash and cash equivalents, if applicable.

s

Please answer all parts of the question. b$.$ Prepare a Year $8$ statement of cash flows using the indirect method.

Note: Use a negative sign with your answer to indicate cash used$/$decrease in cash, if applicable.

Please answer all parts of the question. Change in Cash

Statement of Cash Flows

Ratios

c$.$ Prepare separate schedules showing $(1)$ cash paid for interest and for income taxes and $(2)$ noncash investing and financing transactions.

Note: Use a negative sign with your answer to indicate amount is subtracted, if applicable.

Noncash investing and financing transactions

Please answer all parts of the question.REQUIRED

Change in Cash

Statement of Cash Flows

Cash$/$Noncash Schedules

d$.$ Compute its operating cash flow to current liabilities ratio $($OCFCL$),$ operating cash flow to capital expenditures ratio $($OCFCX$),$ and free cash flow $($FCF$).$

Please answer all parts of the question.