Shown below and on the next page are comparative balance sheets for Matsui Company.

MATSUI COMPANY
Comparative Balance Sheets
December 31

Assets

2010

2009

Cash

$ 68,000

$ 22,000

Accounts receivable

85,000

76,000

Inventories

170,000

189,000

Land

80,000

100,000

Equipment

260,000

200,000

Accumulated depreciation

(66,000)

(32,000)

Total

$597,000

$555,000

Liabilities and Stockholders’ Equity

2010

2009

Accounts payable

$ 39,000

$ 47,000

Bonds payable

150,000

200,000

Common stock ($1 par)

216,000

174,000

Retained earnings

192,000

134,000

Total

$597,000

$555,000

Additional information:

1. Net income for 2010 was $93,000.

2. Cash dividends of $35,000 were declared and paid.

3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.

4. Common stock was issued for $42,000 cash.

5. No equipment was sold during 2010.

Instructions

(a) Prepare a statement of cash flows for 2010 using the indirect method.

(b) Compute these cash basis ratios:

(1) Current cash debt coverage.

(2) Cash debt coverage.