The financial statements of Wetaskiwin Ltd., a private company reporting under ASPE, follow: Additional information: 1. Short-term

Question:

The financial statements of Wetaskiwin Ltd., a private company reporting under ASPE, follow:

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Additional information:

1. Short-term notes receivable are loans to other companies. During the year, the company collected the outstanding balance at December 31, 2020, and made new loans in the amount of $14,000.

2. Equipment was sold during the year. This equipment cost $15,000 originally and had a carrying amount of $10,000 at the time of sale.

3. Equipment costing $10,000 was purchased in exchange for a $10,000 note payable.

4. Depreciation expense is included in operating expenses.

5. Accounts receivable are from the sale of merchandise on credit.

6. Accounts payable relate to the purchase of merchandise on credit.

Instructions

a. Prepare a cash fl ow statement for the year using the indirect method.

b. Prepare the operating section of the cash fl ow statement using the direct method.

Taking It Further

Wetaskiwin Ltd. had a relatively small change in its cash balance in 2021; cash decreased by only $1,000. Is it still necessary or important to prepare a cash flow statement? Explain.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For  book-img-for-question

Accounting Principles Volume 2

ISBN: 978-1119502555

8th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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