Here is a comparative balance sheet for Puffed Up Company:

Here is a comparative balance sheet for Puffed Up Company:


Here is a comparative balance sheet for Puffed Up Company:


Additional information:
1. Net income for 2008 was $98,000. Land was sold at cost.
2. Cash dividends of $40,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $42,000 cash.
5. Sales for 2008 were $978,000.

Instructions
(a) Prepare a statement of cash flows for 2008 using the indirect method.
(b) Compute these cash-basis ratios:
(1) Current cash debt coverage.
(2) Cash debtcoverage.

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