Question 11 The comparative statement of financial position of Pina Colada Inc. as at June 30, 2020, and a statement of comprehensive income for the 2020 fiscal year follow: PINA COLADA INC. Statement of Financial Position June 30, 2020 June 30 Assets 2020 2019 Cash $ 20,000 $ 37,000 Accounts receivable 86,300 75,400 Inventory 103,500 101,200 Prepaid expenses 2,600 6,200 FV-OCI investments 48,000 45,100 Equipment 173,000 160,000 Accumulated depreciation-equipment (35,000) (24,300) Total $398,400 $400,600 Liabilities and Shareholders' Equity Accounts payable $ 112,000 $ 98,500 Income tax payable 1,500 3,800 Dividends payable 5,600 0 Long-term notes payable 85,000 122,000 Common shares 31,400 25,800 Retained earnings 151,000 141,500 Accumulated other comprehensive income 11,900 9,000 Total $398,400 $400,600 PINA COLADA INC. Statement of Comprehensive Income For the Year Ended June 30, 2020 Net sales $320,000 Cost of goods sold 163,000 Gross profit 157,000 Operating expenses 119,500 Income from operations 37,500 Interest expense 9,000 Income before income tax 28,500 Income tax 5,600 Net income 22,900 Other comprehensive income Unrealized gain or loss-OCI 2,900 Comprehensive income $ 25,800 Rectang Additional information: 1. 2. 3. Pina Colada follows IFRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows. Operating expenses include $10,700 in depreciation expense. There were no disposals of equipment during the year. Common shares were issued for cash. During the year, Pina Colada acquired $9,000 of equipment in exchange for long-term notes payable. 4. 5. Prepare the statement of cash flows for Pina Colada for the year ended June 30, 2020, using the indirect method along with any neces with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) PINA COLADA INC. Statement of Cash Flows For the Year Ended June 30, 2020 Cash Flows from Operating Activities 22900 Net Income / (Loss) Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense 10700 Increase in Accounts Receivable - 10900 Increase in Inventory -2300 Decrease in Prepaid Expenses 3600 Decrease in Income Taxes Payable v -2300 Increase in Accounts Payable 13500 12300 Net Cash Provided by Operating Activities 35200 Cash Flows from Investing Activities Purchase of Equipment -4000 Net Cash used by Investing Activities -4000 Cash Flows from Financing Activities Issuance of Common Shares 5600 Payment of Cash Dividends -7800 Repayment of Notes Payable -46000 Net Cash used by Financing Activities -48200 Net Decrease in Cash - 17000 Cash at Beginning of Year 37000 Cash at End of Year 20000 9000 During the year, equipment with a cost of $ was purchased in exchange for a note payable. Prepare the operating activities section of the statement of cash flows for Pina Colada using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) PINA COLADA INC. Statement of Cash Flows V For the Year Ended June 30, 2020 Cash Flows from Operating Activities Cash Received from Customers 309100 Cash Paid for Operating Expenses 119500 Cash Paid to Suppliers 147200 Rectangular Snip Taxes Paid 5600 Interest Paid 9000 X 281300 Net Cash Provided by Operating Activities v 27800
