Data for Kurtzel Company are presented in P12-7A. Further analysis reveals the following. 1. Accounts payable pertain

Question:

Data for Kurtzel Company are presented in P12-7A. Further analysis reveals the following.

1. Accounts payable pertain to merchandise suppliers.

2. All operating expenses except for depreciation were paid in cash.

3. All depreciation expense is in the selling expense category.

4. All sales and purchases are on account.

Instructions

(a) Prepare a statement of cash flows for Kurtzel Company using the direct method.

(b) Compute these cash-based measures:

(1) Current cash debt coverage.

(2) Cash debt coverage.

(3) Free cash flow.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...