LP's Design & Hardware Ltd. had the following Balance Sheet & Income Statement activity during the August 31 2021 fiscal year-ended: Net income Depreciation
LP's Design & Hardware Ltd. had the following Balance Sheet & Income Statement activity during the August 31 2021 fiscal year-ended: Net income Depreciation Issuance of bonds payable Revenue Decrease in accounts payable Proceeds on sale of capital assets Gain on sale of capital assets Long-term investments sold Decrease in bank loan Total liabilities Purchase of land Decrease in wages payable Issuance of common shares $ 175,000 27.500 100,000 2.500,000 28,000 575,000 37.500 72,000 55,000 257,000 250,000 71,000 15,000 Required: a) Prepare the cash flows from investing activities & financing activities section of the Statement of Cash Flows, in good form, using the indirect method. Assume that LP's Design & Hardware Ltd. follows the policy of classifying dividends paid as financing activities and interest paid as operating activities. (4 marks) b) Explain how a company's policies regarding receivables, payables & inventory affect its cash flows relative to net income. (3 marks) c) Assuming LP's Design & Hardware Ltd. had a cash inflow of $78,000 from operating activities and the cash flow from investing & financing activities calculated above, answer the following questions: i, Comment on the company profile based on the cash flow patterns (ie, mature, growing etc.) ii. Calculate the cash flows to total liabilities,
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