Q1) Examine the companys Statement of Cash Flows. Did the company generate sufficient cash flow from operating activities to fund its investing activities in 2021 and 2022? If not, discuss how the cash deficiency was met in each of the two years. These financial statements have been prepared on the going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. During the year ended July 31, 2022, the Company had a net loss of $171,569 and incurred negative cash flow of $8,279 from operations. As at July 31, 2022, the Company had a working capital deficit of $3,603,200 and an accumulated deficit of $27,472,620.

PACIFIC PARADYM ENERGY INC. Statements of Cash Flows (Expressed in Canadian dollars) \begin{tabular}{|c|c|c|} \hline & \begin{tabular}{c} Year ended \\ July 31, \\ 2021 \\ $ \end{tabular} & \begin{tabular}{c} Year ended \\ July 31, \\ 2020 \\ $ \end{tabular} \\ \hline \multicolumn{3}{|l|}{ Operating activities } \\ \hline Net loss for the year & (165,888) & (190,327) \\ \hline \begin{tabular}{l} Items not involving cash: \\ Accretion of decommissioning liabilities \\ Bad debts recovery \\ Gain on disposal of oil and gas property \end{tabular} & \begin{tabular}{r} 49,312 \\ - \\ - \end{tabular} & \begin{tabular}{c} 42,982 \\ (10,192) \\ (24,000) \end{tabular} \\ \hline \begin{tabular}{l} Changes in non-cash operating working capital: \\ Accounts receivable \\ GST receivable \\ Prepaid expenses \\ Accounts payable and accrued liabilities \\ Due to related parties \end{tabular} & \begin{tabular}{r} - \\ 622 \\ (875) \\ 69,897 \\ 18,900 \end{tabular} & \begin{tabular}{r} 10,192 \\ 1,016 \\ - \\ 123,313 \\ 18,900 \end{tabular} \\ \hline Net cash used in operating activities & (28,032) & (28,116) \\ \hline \multicolumn{3}{|l|}{ Investing activities } \\ \hline Proceeds from disposal of oil and gas property & - & 1 \\ \hline Net cash provided by investing activities & - & 1 \\ \hline \multicolumn{3}{|l|}{ Financing activities } \\ \hline \begin{tabular}{l} Advances from related parties \\ Repayments to related parties \end{tabular} & \begin{tabular}{r} 28,290 \\ - \\ \end{tabular} & \begin{tabular}{l} 33,800 \\ (5,550) \\ \end{tabular} \\ \hline Net cash provided by financing activities & 28,290 & 28,250 \\ \hline Change in cash & 258 & 135 \\ \hline Cash, beginning of year & 289 & 154 \\ \hline Cash, end of year & 547 & 289 \\ \hline \end{tabular} PACIFIC PARADYM FNFRGY INC