B C 2 a) Answer a) below: T-accounts if required (no marks) 4 5 6 7 8 9 2019 10 11 Question 5 (15 marks) Armstrong Corporation Statement of Financial Position As at June 30 2020 Assets Cash 405,000 Accounts receivable 181,000 Merchandise inventory 175,000 Long term Investments 437,000 Equipment 1,351,000 Less: Accumulated depreciation (485,000) 2,064,000 Liabilities and Shareholders' Equity Accounts payable 142,000 Income tax payable 7,000 Bonds payable 549,000 Common shares 463,000 Retained earnings 903,000 2,064,000 428,000 156,000 210,000 580,000 1,215,000 (430,000) 2,159.000 12 13 14 15 16 17 18 19 20 178,000 4,000 870,000 403,000 704,000 2,159,000 21 22 23 24 25 28 29 30 31 32 33 Armstrong Corporation Income Statement For the year ended June 30, 2020 Sales Cost of goods sold Gross profit Operating expenses Income from operations Interest expense Gain on sale of equipment Summary Info Question 1 1,085,200 508.900 576,300 321,500 254,800 4,100 6,000 Question 2 Question 3 Question 4 Question 5 + H I J K L M N 0 Q. R D E F G 22 2,064,000 2,159,000 23 24 Armstrong Corporation 25 Income Statement 26 For the year ended June 30, 2020 27 Sales 1,085,200 28 Cost of goods sold 508,900 29 Gross profit 576,300 30 Operating expenses 321,500 31 Income from operations 254,800 32 Interest expense 4,100 33 Gain on sale of equipment 6,000 34 Income before income tax 256,700 35 Income tax expense 32,400 36 Net income 224,300 37 Additional information: 38 Depreciation expense is included in "operating expenses." 39 Accounts payable is related to the purchase of inventory. During the year, a piece of equipment that originally cost $65,000 was sold for 40 cash. The equipment had a book value of $52,000 at the time of the sale. 41 REQUIRED: 42 a) Prepare in good form, a statement of cash flows for the year ended June 30, 2020, using the direct method to report the operating activities. (11.5 marks) b) Prepare the operating activities section only, using the indirect method. (3.5 marks) answer b) below b) 43 44 45 46 47 48 49 Summary Info Louection 1 nuortinn 1 Quection ouection 2 Luction nuoction 5