Shown on the next page are the financial statements of Klemmer Company.

Additional data:1. Depreciation expense was $6,000.2. Dividends of $25,000 were declared and paid.3. During the year, equipment was sold for $10,000 cash. This equipment cost $13,000 originally and had accumulated depreciation of $3,000 at the time of sale.4. Additional equipment was purchased for $8,000 cash.Instructions(a) Prepare a statement of cash flows using the indirect method.(b) Compute these cash-based measures:(1) Current cash debt coverage ratio.(2) Cash debt coverage ratio.(3) Free cashflow.

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KLEMMER COMPANY Comparative Balance Sheets December 31 Assets 2012 2011 $ 25,000 23,000 41,000 $ 33,000 14,000 25,000 Cash Accounts receivable Inventory Property, plant, and equipment Less: Accumulated depreciation $ 73,000 $ 78,000 46,000 (27,000) (24,000) 54,000 Total $135,000 $126,000 Liabilities and Stockholders' Equity $ 23,000 26,000 $ 46,000 23,000 10,000 25,000 22,000 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 20,000 25,000 41,000 Total $135,000 $126,000 KLEMMER COMPANY Income Statement For the Year Ended December 31, 2012 Sales $295,000 Cost of goods sold 194,000 Gross profit Selling expenses Administrative expenses Income from operations Interest expense 101,000 $28,000 9,000 37,000 64,000 7,000 Income before income taxes 57,000 Income tax expense 13,000 $ 44,000 Net income