Determine the current cash debt coverage ratio


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 .

Solution Preview :

Prepared by a verified Expert
Financial Accounting: Determine the current cash debt coverage ratio
Reference No:- TGS02081218

Now Priced at $20 (50% Discount)

Recommended (96%)

Rated (4.8/5)