Shown below are the financial statements of Filmore Company.

FILMORE COMPANY Comparative Balance Sheets December 31 Assets 2014 2013 Cash $ 25,000 $ 33,000 Accounts receivable 23,000 14,000 Inventory 41,000 25,000 Property, plant, and equipment $ 73,000 $ 78,000 Less: Accumulated depreciation (27,000) 46,000 (24,000) 54,000 Total $135,000 $126,000 Liabilities and Stockholders’ Equity Accounts payable $ 23,000 $ 46,000 Income taxes payable 26,000 23,000 Bonds payable 20,000 10,000 Common stock 25,000 25,000 Retained earnings 41,000 22,000 Total $135,000 $126,000 FILMORE COMPANY Income Statement For the Year Ended December 31, 2014 Sales revenue $295,000 Cost of goods sold 194,000 Gross profit 101,000 Selling expenses $28,000 Administrative expenses 9,000 37,000 Income from operations 64,000 Interest expense 3,000 Income before income taxes 61,000 Income tax expense 14,000 Net income $ 47,000 Additional data:

1 Depreciation expense was $6,000.

2 Dividends of $28,000 were declared and paid.

3 During the year, equipment was sold for $10,000 cash. This equipment cost $13,000 originally and had accumulated depreciation of $3,000 at the time of sale.

4 Additional equipment was purchased for $8,000 cash.

Instructions

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

(b) Compute these cash-based measures:

1) Current cash debt coverage.
(2) Cash debt coverage.
(3) Free cash flow.AppendixLO1