The comparative balance sheets for Beckwith Products Company are presented below.

Additional Information:
1. Net income for 2011 was $58,400.
2. Cash dividends of $25,000 were declared and paid during 2011.
3. During 2011, Beckwith issued $50,000 of notes payable and repaid $35,000 principal relating to notes payable.
4. Common stock was issued for $50,000 cash.
5. Depreciation expense was $18,650, and there were no disposals of equipment.

Required:
1. Prepare a statement of cash flows (indirect method) for Beckwith Products for 2011.
2. Compute the following cash-based performance measures: (a) free cash flow, and (b) cash flow adequacy. (Assume that the average amount of debt maturing over the next five years is $85,000. Round ratio to two decimal places.)
3. What can you conclude by examining the patterns in Beckwith€™s cash flows?

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7 3 Inventory Property, plant, and equipmant Accumulated depreciation Liabilities and Equity. 1 0 Retained earnings Total liabilities and equity $272,000