Here is a comparative balance sheet for Oprah Winfrey Company:

Additional information:
1. Net income for 1998 was \(\$ 105,000\).
2. Cash dividends of \(\$ 40,000\) were declared and paid.
3. Bonds payable amounting to \(\$ 50,000\) were redeemed for cash \(\$ 50,000\).
4. Common stock was issued for \(\$ 50,000\) cash.
5. Sales for 1998 were \(\$ 978,000\).
\section*{Instructions}

(a) Prepare a statement of cash flows for 1998 using the indirect method.

(b) Compute these cash-basis ratios:
(1) Current cash debt coverage (2) Cash return on sales (3) Cash debt coverage

Transcribed Image Text:

Assets Cash Accounts receivable Inventories Land Equipment OPRAH WINFREY COMPANY Comparative Balance Sheet December 31 Accumulated depreciation Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total 1998 $ 63,000 85,000 1997 $ 22,000 76,000 180,000 189,000 75,000 100,000 260,000 200,000 (66,000) (42,000) $597,000 $545,000 $ 34,000 150,000 214,000 $ 47,000 200,000 164,000 199,000 134,000 $597,000 $545,000