(Solution) - Presented below are the financial statements of Newman Company -(2025 Original AI-Free Solution)

Paper Details

Presented below are the financial statements of Newman Company.

Additional data:
1. Dividends declared and paid were $27,000.
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.

Instructions
(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 cashflow.