E4.16 (LO 2) (Preparation of a Statement of Cash Flows) A comparative balance sheet for Shab- bona Corporation is presented as follows. December 31 2025 2024 Assets Cash $ 73,000 $ 22,000 Accounts receivable 82,000 66,000 Inventory Land Equipment Accumulated depreciation-equipment Total 180,000 189,000 71,000 110,000 260,000 200,000 (69,000) (42,000) $597,000 $545,000 Liabilities and Stockholders' Equity Accounts payable $ 34,000 $ 47,000 Bonds payable 150,000 200,000 Common stock ($1 par) 214,000 164,000 Retained earnings 199,000 134,000 Total $ 597,000 $545,000 Additional information: 1. Net income for 2025 was $125,000. No gains or losses were recorded in 2020. 2. Cash dividends of $60,000 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. Instructions a. Prepare a statement of cash flows for 2025 for Shabbona Corporation. b. Determine Shabbona Corporation's current cash debt coverage, cash debt coverage, and free cash flow. Comment on its liquidity and financial flexibility. CS Scanned with CamScanner