Mannon Company

Statement of Cash Flows

For the Year Ended December 31, 2019
Notes
Cash flow from operating activities
Cash receipts from customers (480,000 - 29,000) 451,000
Cash payments: 1 258,000
To suppliers 2 56,000
For operating expenses 15,000
For income taxes 18,000 347,000
Net cash provided by operating activities 104,000
Cash flow from investing activities
Purchase of investments -15,000
Purchase of plant assets -85,000
Sale of plant assets 10,000
Net cash provided by investing activities -90,000
Cash flow from financing activities
Issuance of common stock 45,000
Payment of cash dividends -24,000
Net cash provided by financing activities 21,000
Net increase in cash 35,000
Cash at beginning of period 35,000
Cash at end of period 70,000

Noncash investing and financing activities

Conversion of bonds payable into common stock 30,000

Note 1
Cost of goods sold 290,000
Less: Decrese in inventory 12,000
Purchases 278,000
Less: Increase in accounts payable 20,000
Cash payments to supppliers 258,000

Note 2
Operating expenses 60,000
Less: Decrease in prepaid expenses 6,000
Add: Decrease in acrued expenses payable 2,000
Cash payments for operating expenses 56,000
2. Cash basis ratio:
Operating cash flow
a. Current cash debt coverage ratio =
Total liabilities
= 104,000
(99,000 + 117,000) 12
= 0.96 times

b. Cash debt coverage ratio Operating

= cash flow
Average total liabilities
= 104,000
(237,000 + 249,000) 12
= 0.43 times