Practice Question 1 Statement of Cash Flows

The Comparative Balance Sheet of Wilson Ltd as at 30 June 2020 and 2021 are presented below, together with the Income Statement for the Year Ended 30 June 2021. Additional information for the question is also provided below.

Required:

Prepare the statement of cash flows for Wilson Ltd for the year ended 30 June 2021 using the direct method. Show all workings.

Wilson Ltd Comparative balance sheet as at 30 June 2021
Assets		2020			2021
Cash		$ 31 200			$ 55 200
Accounts receivable		79 200			57 600
Inventory		64 800			48 000
Prepaid expenses		31 200			48 000
Land		96 000			96 000
Property, plant and equipment		540 000			480 000
Less: Accumulated depreciation		(162 000)			(120 000)
Total assets		$680 400			$664 800
Liabilities and Shareholders' Equity
Accounts payable		$ 44 400			$ 21 600
Accrued expenses payable		18 000			22 800
Interest payable		3 600			2 400
Income taxes payable		4 800			7 200
Bonds payable		192 000			120 000
Share capital		252 000			295 200
Retained earnings		165 600			195 600
Total liabilities and shareholders' equity		$680 400			$664 800
Wilson Ltd Income Statement For the Year Ended 30 June 2021
Income
Sales revenue	$1 440 000
Gain on sale of PPE assets	6 000			$1 446 000
Less: Expenses
Cost of goods sold	1 200 000
Other expenses	162 000
Interest expense	12 000
Income tax expense	21 600			1 395 600
Net profit				$ 50 400

Additional information:

1. Property Plant and Equipment assets were sold at a sales price of $150 000.

2. Additional equipment was purchased at a cost of $144 000.

3. The other expense category includes depreciation.

4. All sales and purchases of inventory were on credit.