Question: A comparative balance sheet for Shabbona Corporation is presente

A comparative balance sheet for Shabbona Corporation is presented below.


Additional information:
1. Net income for 2014 was $125,000. No gains or losses were recorded in 2014.
2. Cash dividends of $60,000 were declared and paid.
3. Bonds payable amounting to $50,000 were retired through issuance of common stock.

Instructions
(a) Prepare a statement of cash flows for 2014 for Shabbona Corporation.
(b) Determine Shabbona Corporation’s current cash debt coverage, cash debt coverage, and free cash flow. Comment on its liquidity and financialflexibility.
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  • CreatedJune 03, 2013
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