The comparative statement of financial positions for The Blue Group appear below:
Additional information:
1. Profit for the year ending 31 December 2020, was $20,000.
2. Cash dividends of $12,000 were declared and paid during the year.
3. Long-term investments that had a carrying amount of $18,000 were sold for $16,000.
4. Sales for 2020 were $120,000.
Required:
1. Prepare a statement of cash flows for the year ended 31 December 2020.
2. Compute the following cash-based ratios:
a. Current cash debt coverage ratio
b. Cash return on sales ratio
c. Cash debt coverage ratio

Question

The comparative statement of financial positions for The Blue Group appear below:
  Additional information:
1. Profit for the year ending 31 December 2020, was $20,000.
2. Cash dividends of $12,000 were declared and paid during the year.
3. Long-term investments that had a carrying amount of $18,000 were sold for $16,000.
4. Sales for 2020 were $120,000.
Required:
1. Prepare a statement of cash flows for the year ended 31 December 2020.
2. Compute the following cash-based ratios:
 a. Current cash debt coverage ratio
 b. Cash return on sales ratio
 c. Cash debt coverage ratio

Quizplus · Accepted Answer

The Answer of The comparative statement of financial positions for The Blue Group appear below:
  Additional information:
1. Profit for the year ending 31 December 2020, was $20,000.
2. Cash dividends of $12,000 were declared and paid during the year.
3. Long-term investments that had a carrying amount of $18,000 were sold for $16,000.
4. Sales for 2020 were $120,000.
Required:
1. Prepare a statement of cash flows for the year ended 31 December 2020.
2. Compute the following cash-based ratios:
 a. Current cash debt coverage ratio
 b. Cash return on sales ratio
 c. Cash debt coverage ratio

The Comparative Statement of Financial Positions for the Blue Group