Expert answer:Need help with accounting 101- 2 questions stateme
Answer & Explanation:Please complete problem p12-7b and p12-8b Additional data: 1. Depreciation expense was $6,000. 2. Dividends of $28,000 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. (2) Cash debt coverage. (3) Free cash flow. *P12-8B Data for Filmore Company are presented in P12-7B. Further analysis reveals the following. 1. Accounts payable pertains to merchandise creditors. 2. All operating expenses except for depreciation are paid in cash. 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 direct method. (b) Compute these cash-based measures: (1) Current cash debt coverage. (2) Cash debt coverage. (3) Free cash flow.
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