a. Following are balance sheet data for Quality Merchandise, Inc.: December 31 2011 2010 Cash $ 47,000 $ 26,000 Accounts receivable, net 141,000 134,000 Merchandise inventory 83,000 102,000 Prepaid expenses 9,000 11,000 Plant assets (net of accumulated depreciation) 235,000 230,000 Accounts payable 122,000 127,000 Accrued liabilities payable 40,000 41,000 Capital stock 300,000 300,000 Retained earnings 53,000 35,000 Assume that the depreciation recorded in 2011 was USD 15,000. Compute the cash spent to purchase plant assets, assuming no assets were sold or scrapped in 2011.

b.Use the data in the previous exercise. Assume the net income for 2011 was USD 24,000, depreciation was USD 15,000, and dividends declared and paid were USD 6,000. The company paid interest of USD 2,000 and income taxes of USD 14,000. Prepare a statement of cash flowsindirect method. Also prepare any necessary supplemental schedule(s).