Page 1: Part 6 (16 markou minutes) 1 2 3 -- *** The following fiscal 2017 information was obtained from the accounting records and financial statements of Westwood Ltd. 4 5 Westwood Ltd. Income Statement For the year ended December 31, 2017 Page 2: 7 8 6 Sales Cost of goods sold Gross profit Salaries Depreciation Other operating expenses $1,650,000 (1 236,000) 414,000 (109,000) (120,000) (88,000) 9 Gain on sale of building Holding gain Interest expense Net income before taxes Income tax expense Net income 6,000 60,000 (25.000 138,000 (50,000) $ 88.000 Page 3 12 11 10 Westwood Ltd. Comparative Statements of Financial Position December 31, 2017 2017 2016 $75,000 $ 145,000 V Assets: 297 1 2 3 4 5 Westwood Ltd. Comparative Statements of Financial Position December 31, 2017 2017 2016 Assets Cash $ 145,000 $ 75,000 Term deposit (matures in 30 days) 60,000 40,000 Investments, FV-NI 300,000 Accounts receivable 226,000 305,000 Inventory 14,000 Prepaid expenses 850,000 Building Accumulated depreciation Page 2: 200,000 202,000 336,000 35,000 740,000 (356.000) $1272.000 8 6 7 (426.000) $1.474.000 9 Liabilities and shareholders' equity. Accounts payable Salaries payable Interest payable Current portion of bond payable Income taxes payable Dividends payable Bonds payable Common shares Retained earnings $ 525,000 14,000 12,000 60,000 13,000 10,000 $ 406,000 20,000 10,000 40,000 16,000 5.000 219,000 Page 3 213,000 450,000 177,300 $1.474.000 400,000 156.000 $1.272.000 12 11 10 Other information: wine originally costing $100,000 in a prior year was sold 000, Retained camings 177.000 $1.474.000 400,000 156,000 $1,272,000 4 un 5 Other information: -- -- Page 2 6 7 8 GO 1. During 2017, a building originally costing $100,000 in a prior year was sold. 2. Westwood considers dividend payments to be a financing activity and interest payments to be an operating activity. 3. $20,000 in bonds were issued during the year. The interest expense is net of $6,000 of bond premium amortization. 4. Common shares (20,000 common shares were re-purchased during 2017 at a cost of $3.80 per share. Some common shares were also issued for cash. 9 - Page 3 Question 19 (16 points) Prepare in good form Westwood's 2017 cash flow statement using the direct method. 12 11 10 29