How to get RE of 54 880 and Net Income -59120 , highlighted above

Question 4 (60 minutes, 23.5 marks) Today Ad Corp. is a company that provides advertising services to other companies. They have recently relocated in a new office building and, in the moving process, have lost most of their accounting documents. They were able to recover the adjusted trial balance at the end of December 31, 2016 (the current year) and the statement of cash flows prepared using the direct method that managers use internally. Debit Credit $ 117,000 80,000 4,000 400,000 $380,000 20,000 4,000 20,000 Adjusted trial balance at the end of December 31, 2016 Cash Accounts receivable Prepaid insurance Land Building Accumulated depreciation on building Office equipment Accumulated depreciation on office equipment FV-NI Investments Salaries payable Liability for customer lawsuit Employee bonus payable Income tax payable Common shares Bank loan (Town Bank) Building loan Retained earnings Advertising revenue Gain on sale of land Insurance expense Depreciation expense on building Salaries expense Loss from customer lawsuit Expense with employee bonus Income tax expense Interest expense Loss on FV-Nl investments Depreciation expense on office equipment Dividends 7,000 2.000 25,200 2,920 90,000 75,000 132,000 180,000 11,000 20,000 126,000 25,200 33,920 9,000 10,000 4,000 18,000 Statement of Cash Flows for the year ended Dec 31, 2016 Operating Activities Cash collected from clients $215,000 Salaries paid (130,000) Cash paid for insurance (12,000) Cash paid for interest (9,000) Cash paid for customer lawsuit (30,000) Cash paid for taxes (31,000) Cash flow from operations $3,000 Investing activities Proceeds from sale of land Purchase of office equipment Cash flow from investing activities 150,000 (20,000) 130,000 Financing Activities Borrowing from Town Bank Repayment of building loan Issuance of common shares Dividends declared and paid Cash flow from financing activities Net cash flow 50,000 (85,000) 35,000 (18,000) (18,000) $115.000 Instructions: 1. Prepare the statement of financial position December 31, 2016 for Today Ad Corp., in good form with comparative data for the current (2016) and prior (2015) years. Show all your computations. 2. Prepare the operating cash flow part only of the statement of cash flows for the year ending December 31, 2016, using the indirect method. Requirement 1: Today Ad Corp. Statement of Financial Position For the year ended Dec 31, 2016 2016 2015 117000 20000 4000 80000 221000 2000 30000 3000 115000 150000 0 20000 4000 400000 380000 0 36000 257000 0 400000 360000 150000 190000 340000 Assets Current assets Cash FV-NI Investments Prepaid insurance Accounts receivable Total current assets Non-current assets Office equipment Less: Accumulated depreciation on office equi Building Less: Accumulated depreciation on building Land Total non-current assets Total assets Liabilities Current liabilities Salaries payable Liability for customer lawsuit Employee bonus payable Income tax payable Total current liabilities Non-current liabilities Bank loan (TownBank) Building loan Total non-current liabilities Total liabilities Shareholders' equity Common share capital Retained earnings Total shareholders' equity Total liabilities and equity 11000 32000 7000 2000 25200 2920 37120 43000 75000 0 75000 112120 25000 85000 110000 153000 90000 54880 144880 257000 55000 132000 187000 340000 Requirement 2: Operating cash flow using the indirect method 2006 Net income -59120 Loss on FV-NI Investm 10000 Depreciation expense 20000 Depreciation expense on office eq 4000 Decrease in Acc Receivable 35000 Increase in prepaid insurance -1000 Decrease in salaries payable -4000 Decrease in liability -30000 Increase in employee bonus 25200 Increase in income tax payable 2920 Operating cash flow 3000