Response to the following problem:
YOYO Company Comparative Balance Sheets December 31 2008 net income Total $135,000, 2007 $126,000 and the income statement for year ended December 31, 2008 net income $41,000. Additional data:
1. Dividends of $36,000 declared and paid.
2. During the year equipt. was sold for $10,000 cash. Equipt. cost $15,000 originally, bookk value of $10,000 at time of sale.
3. All depreciation expense, $8,000 in selling expense category.
4. All sales & Purchses on account.
5. Additional equipt. purchased for $7,000 cash.
(a) Prepare a statement of cash flows using the indirect method.
(b) Compute these cash-basis measures:
(1) Current cash debt coverage ratio
(2) Cash debt coverage ratio
(3) Free cash flow .