Preparing a Statement of Cash Flows (Indirect Method) Arctic Company's income statement and comparative balance sheets follow ARCTIC COMPANY Balance Sheets Dec. 31 Year 8 Dec. 31 Year 7 \begin{tabular}{|l|r|r|} \hline Assets & & \\ \hline Cash & $39,200 & $22,400 \\ \hline Accounts receivable & 33,600 & 40,000 \\ \hline Inventory & 85,600 & 90,400 \\ \hline Prepaid advertising & 8,000 & 10,400 \\ \hline Plant assets & 288,000 & 177,600 \\ \hline Accumulated depreciation & (62,400) & (44,800) \\ \hline Total assets & $392,000 & $296,000 \\ \hline Liabilities and Stockholders' Equity & & \\ \hline Accounts payable & $13,600 & $24,800 \\ \hline Interest payable & 4,800 & \\ \hline Bonds payable & 160,000 & \\ \hline Common stock & 196,000 & 196,000 \\ \hline Retained earnings & 41,600 & 75,200 \\ \hline Treasury stock & (24,000) & \\ \hline Total liabilities and equity & $392,000 & $296,000 \\ \hline \end{tabular} a. Compute the change in cash that occurred during Year 8.$ b. Prepare a Year 8 statement of cash flows using the indirect method. - Note: Use a negative sign when necessary. c. Compute Arctic's (1) operating cash flow to current liabilities ratio, and (2) operating cash flow to capital expenditures ratio. Does the company have sufficient cash flow to cover its current obligations? Does the company have sufficient cash flow to cover its capital expenditures? Preparing a Statement of Cash Flows (Indirect Method) Arctic Company's income statement and comparative balance sheets follow ARCTIC COMPANY Balance Sheets Dec. 31 Year 8 Dec. 31 Year 7 \begin{tabular}{|l|r|r|} \hline Assets & & \\ \hline Cash & $39,200 & $22,400 \\ \hline Accounts receivable & 33,600 & 40,000 \\ \hline Inventory & 85,600 & 90,400 \\ \hline Prepaid advertising & 8,000 & 10,400 \\ \hline Plant assets & 288,000 & 177,600 \\ \hline Accumulated depreciation & (62,400) & (44,800) \\ \hline Total assets & $392,000 & $296,000 \\ \hline Liabilities and Stockholders' Equity & & \\ \hline Accounts payable & $13,600 & $24,800 \\ \hline Interest payable & 4,800 & \\ \hline Bonds payable & 160,000 & \\ \hline Common stock & 196,000 & 196,000 \\ \hline Retained earnings & 41,600 & 75,200 \\ \hline Treasury stock & (24,000) & \\ \hline Total liabilities and equity & $392,000 & $296,000 \\ \hline \end{tabular} a. Compute the change in cash that occurred during Year 8.$ b. Prepare a Year 8 statement of cash flows using the indirect method. - Note: Use a negative sign when necessary. c. Compute Arctic's (1) operating cash flow to current liabilities ratio, and (2) operating cash flow to capital expenditures ratio. Does the company have sufficient cash flow to cover its current obligations? Does the company have sufficient cash flow to cover its capital expenditures