Preferred Homes Ltd., a private company reporting under ASPE, reported the following for the year ended September 30, 2021:

Additional information:

1. Equipment was purchased for $20,000.

2. Land was purchased for $35,000 cash and a mortgage note payable was issued for the balance.

3. Common shares were issued for $85,000 cash.

Instructions

Prepare the investing and financing activities sections of the cash flow statement and any required note disclosure. Use T accounts to help you calculate the cash flows.

Transcribed Image Text:

2021 2020 Land $300,000 $200,000 Building 350,000 350,000 Equipment Accumulated depreciation Dividends payable Mortgage note payable 139,000 125,000 65,000 55,000 10,000 20,000 110,000 50,000 Common shares 235,000 150,000 Retained earnings 80,000 220,000 Depreciation expense Gain on equipment sold 15,000 2,000 Profit 210,000