Shown on the next page are the financial statements of

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

KLEMMER COMPANY Comparative Balance Sheets December 31 Assets 2012 2011 $ 25,000 23,000 41,000 $ 33,000 14,000 25,000 Ca

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.
(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.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...


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