Shown below and on the next page are comparative balance sheets for Padgett Company.
|
PADGETT COMPANY |
||
|
Assets |
2012 |
2011 |
|
Cash |
$ 68,000 |
$ 22,000 |
|
Accounts receivable |
88,000 |
76,000 |
|
Inventory |
167,000 |
189,000 |
|
Land |
80,000 |
100,000 |
|
Equipment |
260,000 |
200,000 |
|
Accumulated depreciation—equipment |
(66,000) |
(32,000) |
|
Total |
$597,000 |
$555,000 |
|
Liabilities and Stockholders” Equity |
2012 |
2011 |
|
Accounts payable |
$ 39,000 |
$ 43,000 |
|
Bonds payable |
150,000 |
200,000 |
|
Common stock ($1 par) |
216,000 |
174,000 |
|
Retained earnings |
192,000 |
138,000 |
|
Total |
$597,000 |
$555,000 |
Additional information:
1. Net income for 2012 was $93,000.
2. Depreciation expense was $34,000.
3. Cash dividends of $39,000 were declared and paid.
4. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
5. Common stock was issued for $42,000 cash.
6. No equipment was sold during 2012.
7. Land was sold for its book value.
Instructions
(a) Prepare a statement of cash flows for 2012 using the indirect method.
(b) Compute these cash-based ratios:
(1) Current cash debt coverage.
(2) Cash debt coverage.