Presented below are the financial statements of Kurtzel 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.
(2) Cash debt coverage.
(3) Free cashflow.

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KURTZEL COMPANY Comparative Balance Sheets December 31 2014 2013 Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total 35,000 20,000 28,000 60,000 (32,000) $20,000 14,000 20,000 78,000 (24,000) $108,000 $111,000 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earnings Total 19,000 7,000 17,000 18,000 50,000 $111,000 $15,000 8,000 33,000 14,000 38,000 $108,000 KURTZEL COMPANY Income Statement For the Year Ended December 31, 2014 $242,000 175,000 67,000 Sales revenue Cost of goods sold Gross profit Selling expenses Administrative expenses $18,000 6,000 24,000 43,000 3,000 40,000 8,000 32,000 Income from operations Interest expense Income before income taxes Income tax expense Net income