Presented below are the financial statements of Newman Company.

Additional data:
1. Dividends declared and paid were $27,000.
2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
3. All depreciation expense is in the selling expense category.
4. All sales and purchases are on account.

Instructions
(a) Prepare a statement of cash flows using the indirect method.
(b) Compute these cash-basis measures:
(1) Current cash debt coverage ratio.
(2) Cash debt coverage ratio.
(3) Free cashflow.

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Newman Company Balance Sheets December 31 2008 Merchandise inventory Property, plant, and equipment Accumulated depreciation $126,000 Liabilities and Stockholders' E 2 Bonds payable Common stock Retained earnings $126,000 $108,000 Newman Company Income Statement For the Year Ended December 31, 2008 Cost of goods sold $18,000 6,000 Selling expenses Income before income taxes