Presented below are the financial statements of Helwany Company.

Additional data:1. Depreciation expense was $17,500.2. Dividends declared and paid were $20,000.3. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had accumulated depreciation of $9,500 at the time of sale.Instructions(a) Prepare a statement of cash flows using the indirect method.(b) Compute these cash-based measures:(1) Current cash debt coverage ratio.(2) Cash debt coverage ratio.(3) Free cash flow.

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HELWANY COMPANY Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total 2012 2011 $ 35,000 $ 20,000 14,000 20,000 20,000 28,000 60,000 78,000 (32,000) (24,000) $111,000 $108,000 Liabilities and Stockholders' Equity $ 19,000 7,000 $ 15,000 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total 8,000 17,000 33,000 14,000 18,000 50,000 38,000 $111,000 $108,000 HELWANY COMPANY Income Statement For the Year Ended December 31, 2012 Sales $242,000 Cost of goods sold 175,000 Gross profit Selling expenses Administrative expenses 67,000 $18,000 6,000 24,000 Income from operations Interest expense 43,000 3,000 Income before income taxes 40,000 8,000 Income tax expense $ 32,000 Net income