Shown below and on the next page are comparative balance sheets for Matsui Company.

Additional information:
1. Net income for 2010 was $93,000.
2. Cash dividends of $35,000 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. No equipment was sold during 2010.
Instructions
(a) Prepare a statement of cash flows for 2010 using the indirect method.
(b) Compute these cash-basis ratios:
(1) Current cash debt coverage.
(2) Cash debtcoverage.

Transcribed Image Text:

MATSUI COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventorics Land Equipment Accumulated depreciation Total 2010 68,000 85,000 170,000 80,000 260,000 (66,000) $597,000 2009 22,000 76,000 189,000 100,000 200,000 (32,000) $555,000 Liabilities and Stockholders' Equit Accounts payable Bonds payable Common stock (S1 par) Retained carnin Total 2010 S 39,000 150,000 216,000 192,000 $597,000 2009 $47,000 200,000 174,000 134,000 $555,000 gS