Here is a statement of financial position for Big Bang Balloons Pty Ltd: 

Additional information:

1. Profit for 2015 was $126 000. Total expenses were $1 047 600 and included cost of sales expense $633 600, interest paid $18 000, and tax expense $54 000.

2. Cash dividends of $51 600 were declared and paid.

3. Notes payable amounting to $60 000 were redeemed for cash $60 000.

4. Ordinary shares were issued for $60 000 cash.

5. Sales for 2015 were $1 173 600.

6. Land was sold at cost.

Required

(a) Prepare a statement of cash flows for 2015 using the direct method.

(b) Calculate these cash-basis ratios and comment on the cash adequacy indicated by the calculations.

1. Current cash debt coverage

2. Cash return on sales

3. Cash debt coverage.

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Assets Cash Accounts receivable Inventories Land Equipment Accumulated depreciation Total Liabilities and equity Accounts payable Notes payable (long term) Share capital Retained earnings Total BIG BANG BALLOONS PTY LTD Statement of financial position as at 30 June 2015 2015 $ 72000 102 000 216000 90 000 312000 (79 200) $712800 $ 40800 180 000 256 800 235 200 $712800 2014 S 26400 91 200 226 800 120 000 240 000 (50 400) $654 000 $ 56 400 240 000 196 800 160 800 $654 000