Ivanhoe Ltd., a private company reporting under ASPE, reported the following for the years ended May 31, 2017 and 2016. IVANHOE LTD. Balance Sheet May 31 Assets 2017 2016 Cash $33,175 $42,750 Accounts receivable 83,050 74,750 Inventory 168,000 155,750 Prepaid expenses 4,300 5,800 Land 115,750 71,500 Equipment 303,000 183,000 Accumulated depreciation (61,200 (35,750) Total assets $646,075 $497,800 Liabilities and Shareholders' Equity Accounts payable $40,450 $35,750 Dividends payable 5,800 4,300 Income taxes payable 5,300 Mortgage payable 115,000 75,750 Common shares 210,500 161,750 Retained earnings 272,825 214,950 Total liabilities and shareholders' equity $646,075 $497,800 1,500 Additional Information: 1. Profit for 2017 was $116,625. 2. 3. 4. 5. 6. Common shares were issued for $48,750. Land with a cost of $48,750 was sold at a loss of $18,300. Purchased land with a cost of $93,000 with a $53,750 down payment and financed the remainder with a mortgage note payable. No equipment was sold during 2017. Net sales for the year were $671,600. Cost of goods sold for the year was $397,800. Operating expenses, including depreciation expense, were $95,700. Interest expense was $4,300. Income tax expense was $38,875. Accounts payable is used for merchandise purchases. 7. 8. 9. 10. 11. Prepare a cash flow statement for the year using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) IVANHOE LTD. Cash Flow Statement - Direct Method Prepare a cash flow statement for the year using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) IVANHOE LTD. Cash Flow Statement - Direct Method Year Ended May 31, 2017 Operating Activities Cash Receipts From Customers 663300 Cash Payments To Suppliers 405350 $ Cash Payments For Operating Expenses 68750 X Cash Payments For Interest 4300 X Cash Payments For Income Tax 42675 521075 Net Cash Provided by Operating Activities v 142225 Cash Payments For Income Tax 42675 521075 Net Cash Provided by Operating Activities v 142225 Investing Activities Sale of Land 30450 $ Purchase of Land 53750 Purchase of Equipment 120000 Net Cash Provided by Investing Activities v 143300 Financing Activities Issuance of Bonds Payable 48750 Payment of Cash Dividends 57250 Net Cash Provided by Investing Activities 143300 Financing Activities X Issuance of Bonds Payable 48750 $ X Payment of Cash Dividends 57250 X Net Cash Provided by Financing Activities V 8500 Net Decrease in Cash 9575 Cash, June 1, 2016 42750 Cash, May 31, 2017 33175 $ Note X: Land with a cost of $ was purchased by paying $ cash and issuing a mortgage note payable for $
