Question: Data for Trahan Company are presented in P12-7A. Further analysis reveals the following. 1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except

Data for Trahan 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.

Instructions

(a) Prepare a statement of cash flows for Trahan Company 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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