Problem:
Prepare a Statement of Cash Flows for the 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, 2004
Retained earnings, balance, January 1, 2004 $500,000
Add: Earnings available to common stockholders, 2004 150,000
Deduct: Cash dividends declared and paid in 2004 50,000
Retained earnings, balance, December 31, 2004 $600,000