During the year equipment was sold for 10000 cash this

Question

Shown on the next page are the financial statements of Klemmer Company.

Additional data:

1. Depreciation expense was $6,000.
2. Dividends of $25,000 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 ratio.
(2) Cash debt coverage ratio.
(3) Free cashflow.