Question
Brians Ltd. has recently decided to go public and has hired you as their independent accountant. They wish to adhere to IFRS and know that
Brians Ltd. has recently decided to go public and has hired you as their independent accountant. They wish to
adhere to IFRS and know that they must make a statement of cash flows. Their financial statements for 2020
and 2019 are provided below:
Statements of Financial Position
Their financial statements for 2020 and 2019 are provided below:
Statements of Financial Position
Dec 31/20Dec 31/19
Cash............................................................... $ 51,000$ 24,000
Accounts receivable........................................ 45,00027,000
Merchandise inventory................................... 48,00060,000
Property, plant and equipment....................... $ 76,000$ 120,000
Less accumulated depreciation............... (40,000)36,000(38,000)82,000
Total Assets$ 180,000$ 193,000
Accounts payable........................................... $ 22,000 $ 12,000
Income taxes payable..................................... 44,00049,000
Bonds payable............................................... 45,00075,000
Common shares.............................................. 27,00027,000
Retained earnings.......................................... 42,00030,000
Total Liabilities & Shareholders' Equity$ 180,000$ 193,000
Income Statement
Year ended December 31, 2020
Sales.............................................................................................................................. $ 1,050,000
Cost of sales..................................................................................................................... 894,000
Gross profit......................................................................................................................... 156,000
Selling and administrative expenses................................................................................. 99,000
Income from operations........................................................................................................ 57,000
Interest expense................................................................................................................ 9,000
Income before taxes.............................................................................................................. 48,000
Income taxes.................................................................................................................... 12,000
Net income......................................................................................................................... $ 36,000
The following additional data were provided for calendar 2020:
1.Dividends declared and paid were $ 24,000.
2.Equipment was sold for $ 30,000. This equipment originally cost $ 44,000, and had a book value of $ 36,000 at the time of sale. The loss on sale was included in "selling and administrative expenses," as was the depreciation expense for the year.
3.Bonds were retired during the year at par.
Instructions
From the information above, prepare a statement of cash flows (indirect method) for calendar 2020.
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