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Hartzog Corporation’s most recent balance sheet and income statement appear below: Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Statement of Financial Position December 31, Year 2 and Year 1 (in thousands of dollars) Year 2 Year 1 Assets Current assets: Cash $340 $320 Accounts receivable 600 580 Inventory 300 650 Prepaid expenses 40 40 Total current assets 1,280 1,590 Plant and equipment, net 1,220 1,230 Total assets $2,500 $2,820 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $185 $340 Accrued liabilities 20 20 Notes payable, short term 80 260 Total current liabilities 285 620 Bonds payable 330 350 Total liabilities $615 $970 Stockholders’ equity: Preferred stock, $100 par value, 5% 200 440 Common stock, $2 par value 910 910 Additional paid-in capital–common stock 290 290 Retained earnings 485 210 Total stockholders’ equity 1,885 1,850 Total liabilites & stockholders’ equity $2,500 $2,820 Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Income Statement For the Year Ended December 31, Year 2 (in thousands of dollars) Sales (all on account) $5,800 Cost of goods sold 3,480 Gross margin 2,320 Selling and administrative expense 1,717 Net operating income 603 Interest expense 110 Net income before taxes 493 Income taxes (30%) 148 Net income $345 Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $10 thousand. The market price of common stock at the end of Year 2 was $7.04 per share. The times interest earned for Year 2 is closest to: (PLEASE SHOW WORK TO GET RATED!!) A. 2.43 B. 4.48 C. 3.14 D. 5.48 2.)Hocking Corporation’s comparative balance sheet appears below: Ending Balance Beginning Balance Assets: Current assets: Cash and cash equivalents $69,600 $31,700 Accounts receivable 26,400 32,600 Inventory 69,400 67,600 Prepaid expenses 14,400 17,600 Total current assets 179,800 149,500 Property, plant and equipment 372,000 346,500 Loss accumulated depreciation 169,000 144,500 Net property, plant, and equipment 203,000 202,000 Total assets $382,800 $351,500 Liabilities and Stockholder’s Equity: Current liabilities: Accounts payable $19,600 $15,000 Accrued liabilities 67,600 56,000 Income taxes payable 56,600 53,000 Total current liabilities 143,800 124,000 Bonds payable 85,000 87,000 Total liabilities 228,800 211,000 Stockholder’s equity: Common stock 34,500 30,000 Retained earnings 119,500 110,500 Total stockholder’s equity 154,000 140,500 Total liabilities and stockholder’s equity $382,800 351,500 The company’s net income (loss) for the year was $11,500 and its cash dividends were $2,500. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities. The company’s net cash provided by operating activities is: (PLEASE SHOW WORK TO GET RATING) A. $27,700 B. $65,200 C. $51,200 D. $63,400

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