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Purple Bird Ltd. (PBL) is a company that specializes in manufacturing custom stickers for other companies who want to advertise their brand in various places,
Purple Bird Ltd. ("PBL") is a company that specializes in manufacturing custom stickers for other companies who want to advertise their brand in various places, for example on cars, store windows, laptops, etc. As such, PBL requires specialized machinery to produce the final products. Below is a summary of the company's relevant information. Financial statement category As at Dec. 31, 2021 As at Dec. 31, 2020 PP&E - machinery $1,800,000 $1,200,000 Accum. depreciation - machinery $975,000 $650,000 PP&E - office furniture $120,000 $150,000 Accum. depreciation - office furniture $120,000 $150,000 Current portion of long-term debt $120,000 $0 Long-term debt $420,000 $0 Common shares $350,000 $300,000 Retained earnings $2,700,000 $2,350,000 Net income (for the year) $425,000 $315,000 On July 1st, PBL purchased a new specialized machine to allow for custom printing of stickers with a more durable material. The machine cost $600,000. To finance the purchase, PBL obtained a 5-year bank loan for the same amount earlier in the day on July 1st and made the first of 60 monthly principal payments of $10,000 on July 31st. Additionally, PBL had to dispose of some damaged furniture that was fully depreciated (with a residual value of $0) and originally cost $30,000 back in 2015. Surprisingly, PBL was able to generate a $1,000 gain on the disposal of the asset. Cash dividends were paid on October 15th, 2021. Required: Prepare a partial cash flow statement showing the investing activities and financing activities sections only, for the year ended Dec. 31, 2021. You do not need to prepare the operating activities section. (13 marks)
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