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E5.18 (LO3, 4) (Preparation of a Statement of Cash Flows, Analysis) The comparative statements of financial position of Menachem NV at the beginning and end
E5.18 (LO3, 4) (Preparation of a Statement of Cash Flows, Analysis) The comparative statements of financial position of Menachem NV at the beginning and end of the year 2019 appear below. Menachem NV Statements of Financial Position Assets Inc./Dec. Dec 31 2019 37.000 Jan. 1 2019 22.000 Equipment (17,000) (11,000) Less: Accumulated depreciation equipment Accounts receivable 15,000 Inc. 6,000 Inc. 18,000 106,000 88,000 Inc Cash 22.000 13.000 9,000 Inc Total 148.000 112.000 Equity and Liabilities Share capital-ordinary 100,000 80,000 20,000 Inc. Retained earnings 28,000 17,000 11,000 Inc. Accounts payable 20.000 15.000 5,000 Inc. Total 148.000 112.000 Net income of 34,000 was reported, and dividends of 23,000 were paid in 2019. New equipment was purchased and none was sold Instructions a. Prepare a statement of cash flows for the year 2019 b. Compute the current ratio (current assets + current liabilities) as of January 1, 2019, and December 31, 2019, and compute free cash flow for the year 2019 c. In light of the analysis in (b), comment on Menachem's liquidity and financial flexibility
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