Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Exercise 5-16 A comparative balance sheet for Vaughn Corporation is presented as follows. Assets Cash Accounts receivable Inventory Land Equipment Accumulated Depreciation-Equipment Total Liabilities and
Exercise 5-16 A comparative balance sheet for Vaughn Corporation is presented as follows. Assets Cash Accounts receivable Inventory Land Equipment Accumulated Depreciation-Equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total December 31 2020 2019 $ 72,810 $ 22,000 83,460 67,650 181,460 190,650 72,460 111,650 261,460 201,650 (70,460) (43,650) $601,190 $549,950 $ 35,460 $ 48,650 150,000 200,000 214,000 164,000 201,730 137,300 $601,190 $549,950 Additional information: 1. Net income for 2020 was $127,920. No gains or losses were recorded in 2020. 2. Cash dividends of $63,490 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. Prepare a statement of cash flows for 2020 for Vaughn Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) VAUGHN CORPORATION Statement of Cash Flows $ Adjustments to reconcile net income to I $ Issued common stock to retire $ of bonds outstanding Determine Vaughn Corporation's current cash debt coverage, cash debt coverage, and free cash flow. (Round current cash debt coverage and cash debt coverage to 2 decimal places., e.g. 0.67.) : 1 Current cash debt coverage Cash debt coverage :1 Free cash flow $ Comment on its liquidity and financial flexibility. Vaughn has liquidity. Its financial flexibility is Click if you would like to Show Work for this question: Open Show Work
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started