Trudeau Inc. is a private company reporting under ASPE. The following selected account balances were reported in Trudeau Inc.?s financial statements at year end:

Additional information:

1. Purchased $75,000 of equipment for $10,000 cash and a note payable for the remainder.

2. Equipment was also sold during the year.

3. Sold a building that originally cost $50,000.

4. Used cash to purchase land and a building.

5. Mortgage payments and notes payable payments included interest and principal amounts.

6. Common shares were issued for cash.

Instructions

a. Determine the amount of any cash inflows or outflows related to investing activities in 2021. Use T accounts to calculate the cash flows.

b. What was the amount of profit reported by Trudeau Inc. in 2021?c. Determine the amount of any cash inflows or outflows related to financing activities in 2021. Use T accounts to calculate the cash flows.

d. Identify and determine the amount of any noncash financing activities in 2021.

e. Calculate the cash operating activities. Using the cash balances provided, calculate increase or decrease in cash first.

Taking It Further

Is it unfavourable for a company to have a net cash outfl ow from investing activities?

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2021 2020 Cash $ 22,125 $ 10,000 Building 850,000 750,000 Equipment Land 393,000 340,000 100,000 60,000 Accumulated depreciation–building Accumulated depreciation-equipment Dividends payable Mortgage payable Notes payable Common shares: 46,000 shares in 2021; 40,000 in 2020 Retained earnings 307,500 300,000 124,000 94,000 6,250 2,500 545,000 585,000 340,000 310,000 807,000 685,000 200,000 100,000 Cash dividends declared 25,000 10,000 Depreciation expense-buildings 25,000 42,500 49,125 27,000 Depreciation expense-equipment Gain on sale of equipment Loss on sale of building 1,000 10,000 Interest expense 48,250 44,750