5XU Corp., a major retailer of athletic equipment and accessories, operates several stores and

is a publicly traded company. The company is currently preparing its statement of cash flows.

The comparative statement of financial position and income statement for 5XU Corp.as at

May 31, 2020 are as follows:

5XU Corp.

Statement of Financial Position

As at May 31

2020 2019

Current assets

Cash $ 33,250 $ 20,000

Accounts receivable 74,800 55,600

Inventory 188,700 199,000

Prepaid expenses 8,800 7,000

Total current assets 305,550 281,600

Plant assets 596,500 501,500

Less: Accumulated depreciation 148,000 122,000

Net plant assets 448,500 379,500

Total assets $754,050 $661,100

Current liabilities

Accounts payable $123,000 $115,000

Salaries and wages payable 61,000 72,000

Interest payable 24,700 22,600

Total current liabilities 208,700 209,600

Mortgage payable 75,000 100,000

Total liabilities 283,700 309,600

Shareholders equity

Common shares 335,750 280,000

Retained earnings 134,600 71,500

Total shareholders equity 470,350 351,500

Total liabilities and shareholders equity $754,050 $661,100

5XU Corp.

Income Statement

For the Year Ended May 31, 2020

Sales $1,345,800

Cost of goods sold 814,000

Gross margin 531,800

Expenses

Salaries and wages expense 207,800

Interest expense 66,700

Other operating expenses 24,800

Depreciation expense 26,000

Total operating expenses 325,300

Operating income 206,500

Income tax expense 65,400

Net earnings $141,100

The following is additional information about transactions during the year ended May 31,

2020 for 5XU Corp., which follows IFRS:

a. Plant assets costing $95,000 were purchased by paying $44,000 in cash and issuing

5,000 common shares.

b. The other expenses relate to prepaid items.

c. In order to supplement its cash, 5XU Corp. issued 4,000 additional common shares.

d. There were no penalties assessed for the repayment of mortgage.

e. Cash dividends of $78,000 were declared and paid at the end of the fiscal year.

Required

a. Prepare a statement of cash flows for 5XU Corp. for the year ended May 31, 2020,

using the direct method. Support the statement with appropriate calculations, and

provide all required disclosures.