Athabasca Company reported the following abbreviated statement of financial position and statement of earnings for 2011:

ATHABASCA COMPANY

Comparative Statement of Financial Position

ATHABASCA COMPANY

Statement of Earnings

For the year ended December 31, 2011

Required:

a. Prepare a statement of cash flows for Athabasca Company for the year ended December 31, 2011.

b. Was the cash flow generated by the company's operating activities during the year larger or smaller than the net earnings? Should these two amounts be the same? Explain.

c. Was the change in the amount of working capital during the year the same amount as the net earnings? Should these two amounts be the same? Explain.

Transcribed Image Text:

Dec. 31, 2011 Dec. 31, 2010 70,000 140,000 280,000 650,000 (260,000)(230,000 $910,000 Cash Accounts receiwable Inventory $60,000 120,000 320,000 700,000 Property, plant, and equipment Less: Accumulated depreciation Total assets S940,000 Accounts payable Wages and salaries payable Bonds payable Share capital Retained earnings 82,000 8,000 350,000 200,000 300,000 $940,000 S 85,000 10,000 400,000 150,000 265,000 $910,000 Total liabilities and shareholders' equity Sales Cost of goods sold Gross profit 450,000 240,000 210,000 Other expenses Supplies expense Depreciation expense Wages and salaries Other operating expenses Interest expense S 15,000 30,000 00,000 5,000 24,000 174,000 36,000 8,000 S 44,000 Other income Net earnings