Question Details

Condensed financial data of Popler Company 



1
Condensed financial data of Popler Company appear below:
POPLER COMPANY
Comparative Statement of Financial Position
December 31
	   2011		   2010	
Assets

Plant assets	325,000	250,000
Accumulated depreciation	  (65,000)	  (60,000)
Investments	100,000	75,000
Prepaid expenses	19,000	25,000
Inventories	120,000	132,000
Accounts receivable	75,000	53,000
Cash		  61,000	  35,000
	Total	$635,000	$510,000

Equity and Liabilities

Share capital-ordinary	275,000	170,000
Retained earnings	  118,000	    81,000
Bonds payable	120,000	160,000
Accounts payable	  93,000	  75,000
Accrued expenses payable	    29,000	    24,000
	Total	$635,000	$510,000

POPLER COMPANY
Income Statement
For the Year Ended December 31, 2011
Sales		$470,000
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		$  52,000

Additional information:
1.	New plant assets costing $100,000 were purchased for cash in 2011.
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 ordinary shares.
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.


2
The income statement for Javier Company showed cost of goods sold of $85,000 and operating expenses of $55,000. The comparative statement of financial position for the year show that inventory decreased $3,000, prepaid expenses increased $7,000, accounts payable increased $4,000, 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.




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