RAHAN COMPANY
Comparative Balance Sheets
December 31
Assets	2012	2011
Cash	$38,000	$20,000
Accounts receivable	33,000	14,000
Merchandise inventory	27,000	20,000
Property, plant, and equipment	60,000	78,000
Accumulated depreciation	(32,000)	(24,000)
Total	$126,000	$108,000
Liabilities and Stockholders' Equity
Accounts payable	$24,000	$15,000
Income taxes payable	7,000	8,000
Bonds payable	27,000	33,000
Common stock	18,000	14,000
Retained earnings	50,000	38,000
Total	$126,000	$108,000

TRAHAN COMPANY
Income Statement
For the Year Ended December 31, 2012
Sales		$242,000
Cost of goods sold		175,000
Gross profit		67,000
Selling expenses	$18,000
Administrative expenses	6,000	24,000
Income from operations		43,000
Interest expense		3,000
Income before income taxes		40,000
Income tax expense		8,000
Net income		$32,000

Additional data:

1.	Dividends declared and paid were $20,000.
2.	During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
3.	All depreciation expense is in the selling expense category.
4.	All sales and purchases are on account.

(a)	Complete the statement of cash flows using the indirect method below.

(If the amount reduces cash flow put either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45). List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1.)

(b) Compute these cash-basis measures: (Round all ratios to 2 decimal places, e.g. 2.25. For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

Current Cash Debt coverage

Cash debt coverage ratio

Free cash flow