I need help on (d) and (e) of this: I need help on this:   The Arctic Company's income statement and comparative balance sheets at December 31 of 2019 and 2018 are shown below: Sales revenue   $645,000 Cost of goods sold $430,000   Wages expense 91,000   Insurance expense 12,000   Depreciation expense 13,000   Interest expense 15,000   Income tax expense 29,000 590,000       Net income   55,000 Balance sheet:   Dec 31, 2019 Dec 31, 2018 Assets     Cash $41,000 $8,000 Accounts receivable 41,000 32,000 Inventory 90,000 65,000 Prepaid insurance 5,000 7,000 Plant assets 219,000 202,000 Accumlated depreciation (68,000) (55,000) Total assests $328,000 $259,000       Liabilities and Stockholer's equitu     Accounts payable 7,000 10,000 Wages payable 10,000 6,000 Income tax payable 6,000 7,000 Bonds payable 141,000 87,000 Common stock 90,000 90,000 Retained earnings 74,000 59,000 Total liabilities and stockholder's equity $328,000 $259,000       Cash dividends of $40,000 were declared and paid during 2019.  Plant assets were purchased for cash and bonds payable were issued for cash.  Bond interest is paid semi-annually on June 30 and December 31.  Accounts payable relate to merchandise purchases. Required: a) Calculate the change in cash that occured during 2019 b) Prepare a statement of cash flows using the indirect method c) Computer free cash flow d) Compute the operating-cash-flow-to-current-liabilities ratio. e) Compute the operating-cash-flow-to-capital-expenditures ratio.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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I need help on (d) and (e) of this:

I need help on this:

 

The Arctic Company's income statement and comparative balance sheets at December 31 of 2019 and 2018 are shown below:

Sales revenue   $645,000
Cost of goods sold $430,000  
Wages expense 91,000  
Insurance expense 12,000  
Depreciation expense 13,000  
Interest expense 15,000  
Income tax expense 29,000 590,000
     
Net income   55,000

Balance sheet:

  Dec 31, 2019 Dec 31, 2018
Assets    
Cash $41,000 $8,000
Accounts receivable 41,000 32,000
Inventory 90,000 65,000
Prepaid insurance 5,000 7,000
Plant assets 219,000 202,000
Accumlated depreciation (68,000) (55,000)
Total assests $328,000 $259,000
     
Liabilities and Stockholer's equitu    
Accounts payable 7,000 10,000
Wages payable 10,000 6,000
Income tax payable 6,000 7,000
Bonds payable 141,000 87,000
Common stock 90,000 90,000
Retained earnings 74,000 59,000
Total liabilities and stockholder's equity $328,000 $259,000
     

Cash dividends of $40,000 were declared and paid during 2019.  Plant assets were purchased for cash and bonds payable were issued for cash.  Bond interest is paid semi-annually on June 30 and December 31.  Accounts payable relate to merchandise purchases.

Required:

a) Calculate the change in cash that occured during 2019

b) Prepare a statement of cash flows using the indirect method

c) Computer free cash flow

d) Compute the operating-cash-flow-to-current-liabilities ratio.

e) Compute the operating-cash-flow-to-capital-expenditures ratio.

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