Jia Inc. applies ASPE and had the following statement of financial position at the end of

operations for $2013$:

JIA INC.

Statement of Financial Position

December $31,2013$

During $2014,$ the following occurred:

Jia Inc. sold some of its fair value$-$net income investment portfolio for $$19,000.$ This

transaction resulted in a gain of $$3,400$ for the firm. At December $31,2014,$ the remaining

fair value $-$ net income investments in the portfolio had fair value of $$16,400$ and original

cost of $$13,000.$ No investments were purchased in $2014.$

A tract of land was purchased for $$18,000$ cash.

Long$-$term notes payable in the amount of $$17,000$ were retired before maturity by paying

$$17,000$ cash.

Additional $$26,000$ in common shares were issued.

Dividends totalling $$9,200$ were declared and paid to shareholders.

Net income for $2013$ was $$32,000$ after allowing for depreciation of $$12,000.$

Land was purchased through the issuance of $$30,000$ in bonds.

At December $31,2014,$ cash was $$41,000$; accounts receivable was $$41,600$; and accounts

payable remained at $$30,000.$

Instructions

a$)$ Prepare a statement of cash flows for the year ended December $31,2014.$

b$)$ Prepare the statement of financial position as it would appear at December $31,2014$

c$)$ How might the statement of cash flows help the user of the financial statements?

d$)$ Calculate the following ratios:

Free cash flow

Current cash debt coverage ratio

Cash debt coverage ratio

e$)$ What is Jia's cash flow pattern? Discuss any areas of concern.