Cash payments on accounts payable

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Reference no: EM13520325

The balance sheets of Barrier Corporation as of December 31, Year 2, and Year 1, and its statement of income and retained earnings for the year ended December 31, Year 2, follow

BARRIER CORPORATION

Balance Sheets

December 31, Year 2 and Year 1


Year 2

Year 1

Increase (decrease)

Assets




Cash

$ 275,000

$ 180,000

$ 95,000

Accounts receivable

295,000

305,000

(10,000)

Inventories

549,000

431,000

118,000

Investment in Ort Inc., at equity

73,000

60,000

13,000

Land

350,000

200,000

150,000

Plant and equipment

624,000

606,000

18,000

Accumulated depreciation

(139,000)

(107,000)

(32,000)

Goodwill

16,000

20,000

(4,000)

Total assets

$2,043000

$1,695,000

$348,000





Liabilities and Stockholders' Equity




Accounts payable

$ 604,000

$ 563,000

41000

Accrued expenses

150,000

-

150000

Bonds payable

160,000

210,000

(50000)

Deferred income taxes

41,000

30,000

11000

Common stock, par $10

430,000

400,000

30000

Additional paid-in capital

226,000

175,000

51000

Retained earnings

432,000

334,000

98000

Treasury stock, at cost

-

(17,000)

17000

Total liabilities and equity

$2,043,000

$1,695,000

$348000

BARRIER CORPORATION

Statement of Income and Retained Earnings

For Year Ended December 31, Year 2

Net sales

$1,937,000

Undistributed income from Ort Inc.

13,000

Total net revenue

1,950,000

Cost of sales

(1,150,000)

Gross income

800,000

Depreciation expense

$32,000


Amortization of goodwill

4,000


Other expenses (including income taxes

623,000

(659,000)

Net income

$ 141,000

Retained earnings, January 1, Year 2

334,000


475,000

Cash dividends paid

(43,000)

Retained earnings, December 31, Year 2

$ 432,000

Additional information:

  • Capital stock is issued to provide additional cash.
  • All accounts receivable and payable relate to operations.
  • Accounts payable relate only to items included in cost of sales.
  • There are no noncash transactions.

Required:

Determine the following amounts:

a. Cash collected from sales during Year 2.

b. Cash payments on accounts payable during Year 2.

c. Cash receipts during Year 2 not provided by operations.

d. Cash payments for noncurrent assets purchased during Year 2.

Reference no: EM13520325

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