Condensed financial data of Barron Ltd appear below:
Additional information:
1. New plant assets costing $85,000 were purchased for cash in 2020.
2. Old plant assets costing $25,000 were sold for $10,000 cash when their carrying amount was $13,000.
3. Notes with a face value of $30,000 were converted into $30,000 of ordinary shares.
4. A cash dividend of $24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Required:
1. Prepare a statement of cash flows for the year.
2. Compute the following cash basis ratios:
a. Current cash debt coverage
b. Cash return on sales ratio
c. Cash debt coverage ratio

Question

Condensed financial data of Barron Ltd appear below:
  Additional information:
1. New plant assets costing $85,000 were purchased for cash in 2020.
2. Old plant assets costing $25,000 were sold for $10,000 cash when their carrying amount was $13,000.
3. Notes with a face value of $30,000 were converted into $30,000 of ordinary shares.
4. A cash dividend of $24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Required:
1. Prepare a statement of cash flows for the year.
2. Compute the following cash basis ratios:
 a. Current cash debt coverage
b. Cash return on sales ratio
c. Cash debt coverage ratio

Quizplus · Accepted Answer

The Answer of Condensed financial data of Barron Ltd appear below:
  Additional information:
1. New plant assets costing $85,000 were purchased for cash in 2020.
2. Old plant assets costing $25,000 were sold for $10,000 cash when their carrying amount was $13,000.
3. Notes with a face value of $30,000 were converted into $30,000 of ordinary shares.
4. A cash dividend of $24,000 was declared and paid during the year.
5. Accounts payable pertain to merchandise purchases.
Required:
1. Prepare a statement of cash flows for the year.
2. Compute the following cash basis ratios:
 a. Current cash debt coverage
b. Cash return on sales ratio
c. Cash debt coverage ratio

Condensed Financial Data of Barron Ltd Appear Below