Aero Inc had the following statement of financial position

at #1904
Aero Inc had the following statement of financial position at

Aero Inc. had the following statement of financial position at the end of operations for 2016:

During 2017, the following occurred:

1. Aero liquidated its FV-NI investments portfolio at a loss of
$5,000.........................................................................5000
2. A parcel of land was purchased for
$38,000................................................................................................38000
3. An additional $30,000 worth of common shares was issued.
............................................................................. 30000
4. Dividends totalling $10,000 were declared and paid to shareholders.
.....................................................................10000
5. Net income for 2017 was $35,000, including $12,000 in depreciation
expense..........................................................35000
......................................................................................................................................................1
2000
6. Land was purchased through the issuance of $30,000 in additional bonds.
...............................................................30000
7. At December 31, 2017, cash was $70,200; Accounts Receivable was $42,000; and Accounts
Payable was $40,000. ............70200
.....................................................................................................................................................4
2000
.....................................................................................................................................................4
0000
Instructions:
a) Prepare the statement of financial position as it would appear at December 31, 2017.
b) Prepare a statement of cash flows for the year ended December 31, 2017 using the indirect
method. Assume dividends paid are treated as financial activities.
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 c) Calculate the current and acid test ratios for 2016 and 2017.
d) Calculate Aero's free cash flow and the current cash debt coverage ratio for 2017.
e) What is the cash flow pattern? Discuss the sources and uses of cash.
f) Use the analysis of Aero to illustrate how information in the statement of financial position and
statement of cash flows helps the user of the financial statements.

Aero Inc had the following statement of financial position at

ANSWER
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