A comparative balance sheet for the Visser Corporation is presented below: VISSE

Question

A comparative balance sheet for the Visser Corporation is presented below: VISSER CORPORATION Comparative Balance Sheet 2012 2011 Assets Cash $ 40,000 $ 31,000 Accounts receivable (net) 80,000 60,000 Prepaid insurance 22,000 17,000 Land 18,000 40,000 Equipment 70,000 60,000 Accumulated depreciation (20,000) (13,000) Total Assets $210,000 $195,000 Liabilities and Stockholders' Equity Accounts payable $ 12,000 $ 6,000 Bonds payable 27,000 19,000 Common stock 140,000 115,000 Retained earnings 31,000 55,000 Total liabilities and stockholders' equity $210,000 $195,000 Additional information: 1. Net loss for 2012 is $15,000. Net sales for 2012 are $250,000. 2. Cash dividends of $9,000 were declared and paid in 2012. 3. Land was sold for cash at a loss of $5,000. This was the only land transaction during the year. 4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash. 5. $12,000 of bonds were retired during the year at carrying (book) value. 6. Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000. Instructions 1. Prepare a statement of cash flows for the year ended 2012 using the indirect method. 2. Compute the following cash based ratios: a. Current cash debt coverage ratio b. Cash debt coverage ratio

Explanation / Answer

Cash 31000 dividends (9000) Land (5000) equipment 10000 retired bonds (12000) Common stock 25000 net cash remain = 40000 current cash debt coverage ratio = net cash provided by operating activities/ average current liabilities = 9000/39000 = 0.23 cash debt coverage ration = net cash provided by operating activities/debt = 9000/140000 = 0.0642

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.