Data for Molina Company are presented in P12-7B. Further analysis reveals the flows—direct method, and following.

compute cash-based ratios.

(SOl5;16) 1. Accounts payable pertains to merchandise creditors. 2. All operating expenses except for depreciation are paid in cash.

Instructions

(a) Cash from

(a) Prepare a statement of cash flows using the direct method.

operations

(b) Compute these cash-basis measures:

$13,000 (1) Current cash debt coverage ratio.

(2) Cash debt coverage ratio.

(3) Free cash flow.

Prepare a statement of cash