Financial Accounting: P12-10A Data for Cipra Inc. are presented in P12-9A

Financial Accounting                      

*P12-10A                            

Data for Cipra Inc. are presented in P12-9A. Further analysis reveals
that accounts payable pertain to merchandise creditors.                            

CIPRA INC.                         

Comparative Balance Sheets                     

December 31, 2010                        

Assets    2010       2009

Cash       80,800  48,400

Accounts receivable        87,800  33,000

Inventories          112,500                 102,850

Prepaid expenses             28,400  26,000

Investments       138,000                 114,000

Plant assets        285,000                 242,500

Accumulated depreciation            (50,000)              
(52,000)

Total      $682,500              $514,750

                               

Liabilities and Stockholders' Equity                          

Accounts payable           
102,000                 67,300

Accrued expenses payable           16,500  17,000

Bonds payable  110,000                 150,000

Common stock  220,000                 175,000

Retained earnings            234,000                 105,450

Total      $682,500              $514,750

                               

CIPRA INC.                         

Income Statement Data                               

For the Year Ended December 31, 2010                 

Sales                     
392,780

Less: Cost of goods sold                               
135,460

Gross Profit                       
257,320

Operating expenses, excluding depreciation       12,410

Depreciation expense   46,500

Income taxes      27,280

Interest expense              4,730   

Loss on sale of plant assets           7,500     98,420

Net Income                       
$158,900

                               

Additional information:                

1. New plant assets costing $100,000 were purchased for cash during the
year.                 

2. Old plant assets having an original cost of $57,500 were sold for
$1,500 cash.                  

3. Bonds matured and were paid off at face value for cash.                         

4. A cash dividend of $30,350 was declared and paid during the year.                      

                               

Instructions                       

Prepare a statement of cash flows for Cipra Inc. using the direct
method.                          
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