Homework answers / question archive / Financial statements for Hilton Company are presented below: Hilton Company Statement of Financial Position December 31, 2019                        Assets                                                             Equity & Liabilities Buildings and equipment                      $150,000           Share capital-ordinary         $65,000 Accumulated depreciation—                                           Retained earnings          60,000     buildings and equipment                     (50,000)           Patents                                                     20,000            Accounts receivable                                 35,000           Bonds payable          50,000 Cash                                                         40,000           Accounts payable             20,000                                                               €195,000                   €195,000   Hilton Company Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities                   Net income             $45,000         Adjustments to reconcile net income to net cash              provided by operating activities:                     Increase in accounts receivable                         $(16,000)                     Increase in accounts payable                                    8,000                     Depreciation expense                                             15,000                     Gain on sale of equipment                                     (6,000)                     Amortization of patents                                                         2,000       3,000 Net cash provided by operating activities             48,000 Cash flows from investing activities         Sale of equipment                                                               12,000         Purchase of land                                                               (25,000)         Purchase of buildings and equipment                              (48,000) Net cash used by investing activities             (61,000) Cash flows from financing activities         Payment of cash dividend                                                (15,000)         Sale of bonds                                                                     40,000 Net cash provided by financing activities              25,000 Net increase in cash             12,000 Cash, January 1, 2019              28,000 Cash, December 31, 2019             €40,000   At the beginning of 2019, Accounts Payable amounted to €12,000 and Bonds Payable was €10,000

Financial statements for Hilton Company are presented below: Hilton Company Statement of Financial Position December 31, 2019                        Assets                                                             Equity & Liabilities Buildings and equipment                      $150,000           Share capital-ordinary         $65,000 Accumulated depreciation—                                           Retained earnings          60,000     buildings and equipment                     (50,000)           Patents                                                     20,000            Accounts receivable                                 35,000           Bonds payable          50,000 Cash                                                         40,000           Accounts payable             20,000                                                               €195,000                   €195,000   Hilton Company Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities                   Net income             $45,000         Adjustments to reconcile net income to net cash              provided by operating activities:                     Increase in accounts receivable                         $(16,000)                     Increase in accounts payable                                    8,000                     Depreciation expense                                             15,000                     Gain on sale of equipment                                     (6,000)                     Amortization of patents                                                         2,000       3,000 Net cash provided by operating activities             48,000 Cash flows from investing activities         Sale of equipment                                                               12,000         Purchase of land                                                               (25,000)         Purchase of buildings and equipment                              (48,000) Net cash used by investing activities             (61,000) Cash flows from financing activities         Payment of cash dividend                                                (15,000)         Sale of bonds                                                                     40,000 Net cash provided by financing activities              25,000 Net increase in cash             12,000 Cash, January 1, 2019              28,000 Cash, December 31, 2019             €40,000   At the beginning of 2019, Accounts Payable amounted to €12,000 and Bonds Payable was €10,000

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Financial statements for Hilton Company are presented below:

Hilton Company

Statement of Financial Position

December 31, 2019

                       Assets                                                             Equity & Liabilities

Buildings and equipment                      $150,000           Share capital-ordinary         $65,000

Accumulated depreciation—                                           Retained earnings          60,000

    buildings and equipment                     (50,000)          

Patents                                                     20,000           

Accounts receivable                                 35,000           Bonds payable          50,000

Cash                                                         40,000           Accounts payable             20,000

                                                              €195,000                   €195,000

 

Hilton Company

Statement of Cash Flows

For the Year Ended December 31, 2019

Cash flows from operating activities          

        Net income             $45,000

        Adjustments to reconcile net income to net cash

             provided by operating activities:

                    Increase in accounts receivable                         $(16,000)

                    Increase in accounts payable                                    8,000

                    Depreciation expense                                             15,000

                    Gain on sale of equipment                                     (6,000)

                    Amortization of patents                                                         2,000       3,000

Net cash provided by operating activities             48,000

Cash flows from investing activities

        Sale of equipment                                                               12,000

        Purchase of land                                                               (25,000)

        Purchase of buildings and equipment                              (48,000)

Net cash used by investing activities             (61,000)

Cash flows from financing activities

        Payment of cash dividend                                                (15,000)

        Sale of bonds                                                                     40,000

Net cash provided by financing activities              25,000

Net increase in cash             12,000

Cash, January 1, 2019              28,000

Cash, December 31, 2019             €40,000

 

At the beginning of 2019, Accounts Payable amounted to €12,000 and Bonds Payable was €10,000.

 

 

 

Requirement

 

Calculate the following for Hilton Company:

a.  Current cash debt coverage (3 marks)

b.  Cash debt coverage (3 marks)

c.  Free cash flow (4 marks)