Shown below and on the next page are comparative balance sheets for Schmitt Company.

Additional information:

1. Net income for 2014 was $93,000.

2. Depreciation expense was $34,000.

3. Cash dividends of $39,000 were declared and paid.

4. Bonds payable amounting to $50,000 were redeemed for cash $50,000.

5. Common stock was issued for $42,000 cash.

6. No equipment was sold during 2014.

7. Land was sold for its book value.

Instructions

(a) Prepare a statement of cash flows for 2014 using the indirect method.

(b) Compute these cash-based ratios:

(1) Current cash debt coverage.

(2) Cash debt coverage.

SCHMITT COMPANY Comparative Balance Sheets December 31 Assets 2014 2013 $ 68,000 88,000 167,000 80,000 $ 22,000 76,000 189,000 100,000 Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment 260,000 200,000 (32,000) (66,000) Total $555,000 $597,000 Liabilities and Stockholders' Equity 2014 2013 $ 39,000 $ 43,000 Accounts payable Bonds payable Common stock ($1 par) Retained earnings 150,000 216,000 192,000 $597,000 200,000 174,000 138,000 Total $555,000