Ficus Inc. had the following balance sheet at December 31, 20

FICUS INC.

BALANCE SHEET

31-Dec-16

Cash $31,000.00 Accounts Payable $61,000.00

Accounts Recceivable 56,800.00 Notes Payable (Long-Term) 76,000.00

Investments 86,000.00 Common Stock 200,000.00

Plant Asssets (Net) 138,500.00 Retained Earnings 41,300.00

Land 66,000.00

378,300.00 378,300.00

During 2017, the following occurred.

1 Ficus liquidated its available-for-sale investment portfolio at a gain of $15,000.

2 A tract of land was purchased for $61,000 cash.

3 An additional $15,200 in common stock was issued at par.

4 Dividends totaling $41,000 were declared and paid to stockholders.

5 Net income for 2017 was $46,000, including $8,000 in depreciation expense.

6 Land was purchased through the issuance of $195,000 in additional notes payable.

7 At December 31, 2017, Cash was $68,000, Accounts Receivable was $84,000, and Accounts Payable was $72,000.

Instructions

(a) Prepare a statement of cash flows for the year 2017 for Ficus.

(b) Prepare the balance sheet as it would appear at December 31, 2017.

(c) Compute Ficus free cash flow and the current cash debt coverage ratio for 2017.

(d) Use the analysis of Ficus to illustrate how information in the balance sheet and statement of cash flows helps the user of the financial statements.