Coyote Ltd., a private company reporting under ASPE, reported the following for the years ended May 31, 2021, and 2020.

Additional information:

1. Profit for 2021 was $108,000.

2. Common shares were issued for $50,000.

3. Land with a cost of $50,000 was sold at a loss of $20,000.

4. Purchased land with a cost of $100,000 with a $55,000 down payment and financed the remainder with a mortgage note payable.

5. No equipment was sold during 2021.

Instructions

Prepare a cash flow statement for the year using the indirect method.

Taking It Further

Is it unfavourable for a company to have a net cash outflow from financing activities?

Transcribed Image Text:

COYOTE LTD. Balance Sheet May 31 Assets 2021 2020 Cash $ 12,600 $ 43,000 Accounts receivable 85,000 76,000 Inventory Prepaid expenses Land 172,000 160,000 5,000 7,500 125,000 75,000 Equipment Accumulated depreciation 325,000 190,000 (68,250) (40,000) Total assets $656,350 $511,500 Liabilities and Shareholders' Equity $ 43,000 $ 38,000 Accounts payable Dividends payable Income taxes payable Mortgage payable 7,500 5,000 2,500 6,000 125,000 80,000 Common shares 217,000 167,000 Retained earnings Total liabilities and shareholders' equity 261,350 215,500 $656,350 $511,500