Question Details

The income statement for Jones Company 



+Ex. 1
Condensed financial data of Drake Company appear below:
DRAKE COMPANY
Comparative Balance Sheet
December 31
	   2014		   2013	
Assets
Cash		$  41,000	$  35,000
Accounts receivable	75,000	53,000
Inventories	120,000	132,000
Prepaid expenses	19,000	25,000
Investments	100,000	75,000
Plant assets	325,000	250,000
Accumulated depreciation	  (65,000)	  (60,000)
	Total	$615,000	$510,000

Liabilities and Stockholders' Equity
Accounts payable	$  93,000	$  75,000
Accrued expenses payable	29,000	24,000
Bonds payable	120,000	160,000
Common stock	275,000	170,000
Retained earnings	  98,000	    81,000
	Total	$615,000	$510,000

DRAKE COMPANY
Income Statement
For the Year Ended December 31, 4
Sales		$450,000
Less:
	Cost of goods sold	$300,000
	Operating expenses (excluding depreciation)	60,000
	Depreciation expense	17,000
	Income taxes	20,000
	Interest expense	18,000
	Loss on sale of plant assets	      3,000	  418,000
Net income		$  32,000

Additional information:
1.	New plant assets costing $100,000 were purchased for cash in 2014.
2.	Old plant assets costing $25,000 were sold for $10,000 cash when book value was $13,000.
3.	Bonds with a face value of $40,000 were converted into $40,000 of common stock.
4.	A cash dividend of $15,000 was declared and paid during the year.
5.	Accounts payable pertain to merchandise purchases.
Instructions
Prepare a statement of cash flows for the year using the direct method.




aEx. 2
The income statement for Jones Company showed cost of goods sold of $80,000 and operating expenses of $65,000. The comparative balance sheets for the year show that inventory decreased $5,000, prepaid expenses increased $7,000, accounts payable increased $3,000, and accrued expenses payable decreased $5,000.
Instructions
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses using the direct method.






Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help