Jia Inc. applies ASPE and had the following statement of financial position at the end of operations for 2016:

During 2017, the following occurred:
1. Jia Inc. sold some of its trademarks. The trademarks had an unlimited useful life and a cost of $10,000. They were sold for proceeds of $20,000.
2. Machinery was purchased in exchange for long-term debt of $40,000.
3. Long-term debt in the amount of $15,000 were retired before maturity by paying $15,000 cash.
4. An additional $12,000 in common shares was issued.
5. Dividends totalling $14,000 were declared and paid to shareholders.
6. Net income for 2017 was $44,000 after allowing for depreciation of $19,000.
7. Machinery with a carrying value of $18,000 was sold for a gain of $7,000.
8. At December 31, 2017, Cash was $68,500; Accounts Receivable was $111,000; Accounts Payable was $83,000 and inventory increased to $107,000.
Instructions
(a) Prepare a statement of cash flows for the year ended December 31, 2017 using the indirect method.
(b) Prepare the statement of financial position as it would appear at December 31, 2017.
(c) How might the statement of cash flows help the user of the financial statements?
*(d) Calculate the following ratios:
1. Free cash flow
2. Current cash debt coverage ratio
3. Cash debt coverage ratio
(e) What is Jia's cash flow pattern? Discuss any areas of concern.

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JIA INC. Statement of Financial Position December 31, 2016 Cash Accounts receivable Inventory Machinery (net) Trademarks $50,500 90,000 82,000 125,000 20,000 $367,500 Accounts payable Long-term debt Common shares Retained earnings 93,000 85,000 100,000 89,500 $367,500