The Comparative Balance Sheets for Russell Company Appear Below

question 68

Essay

The comparative balance sheets for Russell Company appear below:
Additional information:
1. Net income for the year ending December 31, 2014, was $30,000.
2. Cash dividends of $12,000 were declared and paid during the year.
3. Stock investments that had a book value of $18,000 were sold for $13,000.
4. Sales for 2014 are $130,000.
Instructions
1. Prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method.
2. Compute the following cash based ratios:
a. Current cash debt coverage
b. Cash debt coverage

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Definitions:

Minor

An individual under the legal age of majority, typically 18 years in many jurisdictions, not having full legal rights and responsibilities.

Non-necessary Items

Products or services deemed not essential for basic living and functioning.

Gifts

Voluntary transfers of property or funds to another party without expecting anything in return.

Minor

A person under the legal age of adulthood, which varies by country but is commonly 18 years old.