Question 1 Below is the comparative balance sheet for Cambridge Industries Ltd.: Cambridge Industries Ltd. Balance Sheet December 31 2020 2019 Assets: Cash $ 32,300 $ 40,800 Accounts receivablo 79,900 107,100 88,400 81,600 Investments --trading (FVNI) 86,700 49,300 Land Plant assets 425,000 345,100 Accumulated depreciation - plant assets (147,900) (136,000) Total assets $ 564,400 $ 487,900 Liabilities and Equity Accounts payable $ 18,700 S 6,800 8,000 Current portion of long-term note 10,000 119,500 75,000 Long-term note payable 130,900 81.600 Common shares 287,300 314,500 Retained earnings Total liabilities and equity $.564,400 $487.900 Additional information: 1 1. Net income for the year ended December 31, 2019 was $161,500. 2. Cash dividends were declared and paid during 2019. 3. Plant assets with an original cost of $51,000 and with accumulated depreciation of $13,600 were sold for proceeds equal to book value during 2019. 4. The investments are reported at their fair value on the balance sheet date. During 2019, investments with a cost of $12,000 were purchased. No other investment transactions occurred during the year. Fair value adjustments are reported directly on the income statement. 5. In 2019 land was acquired through the issuance of common shares. The balance of the common shares issued were for cash. Required: Using the indirect method, prepare the statement of cash flows for the year ended December 31, 2019 in good form including all required disclosures. Question 2 Below is a list of independent transactions. For each transaction, identify which section of the statement of cash flows it is to be reported and indicate if it is a cash in- flow (a positive number) or cash out-flow (negative number). (Hint: recall the use of the accounting equation A=L+E to help determine if an amount is a positive or negative number.) + Description Section Amount Issue of bonds payable of $500 cash Investing Sale of land and building of $60,000 cash Investing Retirement of bonds payable of $20,000 cash Current portion of long-term debt changed from $56,000 to $50,000 Repurchase of company's own shares of $120,000 cash Issuance of common shares of $80,000 cash Payment of cash dividend of $25,000 recorded to retained earnings Purchase of land of $60,000 cash and a $100,000 note Cash dividends received from a trading investment of $5,000 Interest income received in cash from an investment of $2,000 Interest and finance charges paid of $15,000 Purchase of equipment for $32,000 Increase in accounts receivable of $75,000 Decrease in a short-term note payable of $10,000 Increase in income taxes payable of $3,000 Purchase of equipment in exchange for a $14,000 long-term note Question 1 Below is the comparative balance sheet for Cambridge Industries Ltd.: Cambridge Industries Ltd. Balance Sheet December 31 2020 2019 Assets: Cash $ 32,300 $ 40,800 Accounts receivablo 79,900 107,100 88,400 81,600 Investments --trading (FVNI) 86,700 49,300 Land Plant assets 425,000 345,100 Accumulated depreciation - plant assets (147,900) (136,000) Total assets $ 564,400 $ 487,900 Liabilities and Equity Accounts payable $ 18,700 S 6,800 8,000 Current portion of long-term note 10,000 119,500 75,000 Long-term note payable 130,900 81.600 Common shares 287,300 314,500 Retained earnings Total liabilities and equity $.564,400 $487.900 Additional information: 1 1. Net income for the year ended December 31, 2019 was $161,500. 2. Cash dividends were declared and paid during 2019. 3. Plant assets with an original cost of $51,000 and with accumulated depreciation of $13,600 were sold for proceeds equal to book value during 2019. 4. The investments are reported at their fair value on the balance sheet date. During 2019, investments with a cost of $12,000 were purchased. No other investment transactions occurred during the year. Fair value adjustments are reported directly on the income statement. 5. In 2019 land was acquired through the issuance of common shares. The balance of the common shares issued were for cash. Required: Using the indirect method, prepare the statement of cash flows for the year ended December 31, 2019 in good form including all required disclosures. Question 2 Below is a list of independent transactions. For each transaction, identify which section of the statement of cash flows it is to be reported and indicate if it is a cash in- flow (a positive number) or cash out-flow (negative number). (Hint: recall the use of the accounting equation A=L+E to help determine if an amount is a positive or negative number.) + Description Section Amount Issue of bonds payable of $500 cash Investing Sale of land and building of $60,000 cash Investing Retirement of bonds payable of $20,000 cash Current portion of long-term debt changed from $56,000 to $50,000 Repurchase of company's own shares of $120,000 cash Issuance of common shares of $80,000 cash Payment of cash dividend of $25,000 recorded to retained earnings Purchase of land of $60,000 cash and a $100,000 note Cash dividends received from a trading investment of $5,000 Interest income received in cash from an investment of $2,000 Interest and finance charges paid of $15,000 Purchase of equipment for $32,000 Increase in accounts receivable of $75,000 Decrease in a short-term note payable of $10,000 Increase in income taxes payable of $3,000 Purchase of equipment in exchange for a $14,000 long-term