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Aero Inc. had the following balance sheet at December 31, 2013. AERO INC. BALANCE SHEET DECEMBER 31, 2013 Cash $ 23,800 Accounts payable $ 33,800

Aero Inc. had the following balance sheet at December 31, 2013.

AERO INC. BALANCE SHEET DECEMBER 31, 2013

Cash $ 23,800 Accounts payable $ 33,800
Accounts receivable 25,000 Bonds payable 44,800
Investments 32,000 Common stock 103,800
Plant assets (net) 84,800 Retained earnings 27,000
Land 43,800 $209,400
$209,400

During 2014, the following occurred.

1. Aero liquidated its available-for-sale investment portfolio at a loss of $8,800.
2. A tract of land was purchased for $41,800.
3. An additional $30,000 in common stock was issued at par.
4. Dividends totaling $13,800 were declared and paid to stockholders.
5. Net income for 2014 was $38,800, including $15,800 in depreciation expense.
6. Land was purchased through the issuance of $33,800 in additional bonds.
7. At December 31, 2014, Cash was $74,000, Accounts Receivable was $45,800, and Accounts Payable was $43,800.

a) Prepare a statement of cash flows for the year 2014 for Aero. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

b) Prepare the balance sheet as it would appear at December 31, 2014. (List Assets in order of liquidity.)

c) Compute Aeros free cash flow and the current cash debt coverage ratio for 2014. (Round ratio to 2 decimal places, e.g. 0.56.)

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