Question: Data for Rivera Company are presented in P12-7B. Further analysis reveals the following. 1. Accounts payable pertains to merchandise creditors. 2. All operating expenses except

Data for Rivera Company are presented in P12-7B. Further analysis reveals the following.

1. Accounts payable pertains to merchandise creditors.

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

Instructions

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

(b) Compute these cash-basis measures:

(1) Current cash debt coverage ratio.

(2) Cash debt coverage ratio.

(3) Free cash flow.


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