The income statement of Anne Droid Inc. reported the following condensed information. ANNE DROID INC. Income Statement For the Year Ended December 31, 2012 Sales revenue $545,000 Operating expenses 400,000 Income from operations 145,000 Income tax expense 36,000 Net income $109,000 Anne Droid’s balance sheet contained these comparative data at December 31. 2012 2011 Accounts receivable $50,000 $70,000 Accounts payable 30,000 51,000 Income taxes payable 10,000 4,000 Anne Droid has no depreciable assets. Accounts payable pertain to operating expenses. Instructions Prepare the operating activities section of the statement of cash fl ows using the indirect method.

Lydex Company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet   This Year Last Year Assets     Current assets:     Cash $ 1,020,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2,040,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 210,000 Total current assets 7,890,000 5,910,000 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,020,000 Liabilities and Stockholders' Equity     Liabilities:     Current liabilities $ 4,070,000 $ 3,100,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,770,000 6,200,000 Stockholders' equity:     Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,260,000 1,320,000 Total stockholders' equity 9,760,000 8,820,000 Total liabilities and stockholders' equity $ 17,530,000 $ 15,020,000 Lydex Company Comparative Income Statement and Reconciliation   This…

Lydex Company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet   This Year Last Year Assets     Current assets:     Cash $ 1,020,000 $ 1,260,000 Marketable securities 0 300,000 Accounts receivable, net 2,940,000 2,040,000 Inventory 3,660,000 2,100,000 Prepaid expenses 270,000 210,000 Total current assets 7,890,000 5,910,000 Plant and equipment, net 9,640,000 9,110,000 Total assets $ 17,530,000 $ 15,020,000 Liabilities and Stockholders' Equity     Liabilities:     Current liabilities $ 4,070,000 $ 3,100,000 Note payable, 10% 3,700,000 3,100,000 Total liabilities 7,770,000 6,200,000 Stockholders' equity:     Common stock, $75 par value 7,500,000 7,500,000 Retained earnings 2,260,000 1,320,000 Total stockholders' equity 9,760,000 8,820,000 Total liabilities and stockholders' equity $ 17,530,000 $ 15,020,000 Lydex Company Comparative Income Statement and Reconciliation   This…

The following is an income statement from the financial records of Peace, Love and Joy Company for the year ended December 31, 2015: Income Statement   Sales (net) $ 245,675 Cost of Goods Sold (67,500) Gross Profit $ 178,175 Operating expenses (125,000) Operating Income $ 53,175 Interest revenue 5,600 Interest expense (8,750) Income before taxes $ 50,025 Income tax expense (15,008) Net Income $ 35,017 Refer to Exhibit 5-2. Compute earnings-based interest coverage for Peace, Love, and Joy Company. 6.72 times 5.72 times 16.88 times 6.08 times