QUESTION 4:

The following parts are independent.

PART 1 (19 marks):

The comparative balance sheets for Kawartha Corporation appear below:

KAWARTHA CORPORATION

Comparative Balance Sheet at December 31st

20202019

Assets

Cash$ 26,000$ 12,000

Accounts receivable17,00014,000

Prepaid expenses5,0009,000

Inventory26,00018,000

Land-0-18,000

Equipment60,00030,000

Accumulated depreciationequipment(18,000)(14,000)

Total assets$ 116,000$ 87,000

Liabilities and Shareholders' Equity

Accounts payable$ 20,000$ 9,000

Long-term note payable37,00045,000

Common shares41,00023,000

Retained earnings18,00010,000

Total liabilities and shareholders' equity$ 116,000$ 87,000

Additional information:

1. Profit for the year ending December 31, 2020 was $25,000.

2. Land that had a carrying amount of $18,000 was sold for cash of $16,000.

3. Cash dividends were declared and paid during the year.

4. Reduced a long-term note payable by making a payment.

REQUIRED:

Statement of Cash Flows, using theindirectmethod, for the year ended December 31, 2020 in proper format.

QUESTION 4 - PART 2 (6 marks):

The general ledger of the Culinary Plate's Food Company provides the following information:

End ofBeginning of

YearYear

Accounts Receivable$ 65,000$ 84,000

Inventory350,000200,000

Accounts Payable40,00065,000

The company's net sales for the year were $2,200,000 and cost of goods sold amounted to $1,750,000.

REQUIRED:

Calculate the following(Show calculations):

(a) Cash receipts from customers

(b) Cash payments to suppliers