Statement of Cash Flows $($Direct Method$)$

The Rural Company's income statement and comparative balance sheets as of December $31$ of the current and previous year are shown below:

RURAL COMPANY

Income Statement

For the Year Ended December $31$

Sales Revenue $$756,000$

Cost of Goods Sold $$451,200$

Wages Expense $128,400$

Depreciation Expense $24,000$

Rent Expense $33,600$

Income Tax Expense $37,200674,400$

Net Income $$81,600$

Dec. $31.$

Current Year Dec. $31,$

Previous Year

Assets

Cash $$24,000$ $$44,400$

Accounts Receivable $62,40072,000$

Inventory $164,400132,000$

Prepaid Rent $16,80014,400$

Plant Assets $504,000360,000$

Accumulated Depreciation $-150,000-126,000$

Total Assets $$518,000$ $$414,000$

Liabilities and Stockholders Equity

Accounts Payable $$34,800$ $$20,400$

Wages Payable $14,4008,400$

Income Tax Payable $6,0009,600$

Common Stock $352,800302,400$

Paid$-$in$-$capital in excess of par value $86,40069,600$

Retained Earnings $127,20086,400$

Total Liabilities and Stockholders' Equity $$518,000$ $$414,000$

Cash dividends of $$40,800$ were declared and paid during the current year. Plant assets were purchased for cash and additional common stock was issued for cash. Accounts payable relate to merchandise purchases.

Required

a$.$ Calculate the change in cash that occurred during the current year.

b$.$ Prepare a statement of cash flows using the direct method.

c$.$ Compute free cash flow.

d$.$ Compute the operating$-$cash$-$flow$-$to$-$current$-$liabilities ratio.

e$.$ Compute the operating$-$cash$-$flow$-$to$-$capital$-$expenditures ratio.

b$.$ Use a negative sign with cash outflow answers

RURAL COMPANY

Statement of Cash Flows

For Year Ended December $31$

Cash Flow from Operating Activities

Cash Received from Customers $

Cash paid for Merchandise Purchased $

Cash Paid to Employees

Cash Paid for Rent

Cash Paid for Income Taxes

Cash Provided by Operating Activities

Cash Flow from Investing Activities

Purchase of Plant Assets

Cash Flow from Financing Activities

Issuance of Common Stock

Payment of Dividends

Cash Provided by Financing Activities

Net Change in Cash

Cash at Beginning of Year

Cash at End of Year $