Question #5 (continued) 2. Prepare the investing activities section of the statement of cash flows. (2 marks) Cash used (provided) for investing activities 3. Prepare the financing activities section of the statement of cash flows. (4 marks) Cash used (provided) for financing activities 4. Reconcile the change in cash and cash equivalents during 2020 (2 marks) 5. Include note disclosure of the non-cash transactions, if any. (1 mark) Comparative Statement of Financial Position as of May 31, 2021 and May 31, 2020 May 31, 2021 2020 Assets Cash $ 33,000 $ 15,000 Cash equivalents 10,250 5000 Accounts receivable 70,000 50,000 Merchandise inventory 210,000 250,000 Prepaid expenses 9,000 7,000 Total current assets $332.250 $327.000 Capital assets: Capital assets 600,000 510,000 Less: Accumulated depreciation (150,000) (125,000) Net capital assets 450,000 385,000 Total assets $782.250 $712.000 Liabilities and Shareholders' Equity Accounts payable $123,000 $115,000 Salaries payable 47,250 72,000 Interest payable 27,000 25,000 Total current liabilities 197,250 212,000 Long-term debt: Bonds payable 70,000 100,000 Total liabilities 267.250 312,000 Shareholder's Equity Common shares 370,000 280,000 Retained earnings 145,000 120,000 Total shareholders' equity 515,000 400,000 Total liabilities and shareholders' equity $782.250 $712.000 Spoke Company Income Statement for the Year Ended May 31, 2021 $1,255,250 712,000 543,250 Sales Cost of merchandise sold Gross margin Expenses: Salary expense Interest expense Other expenses Depreciation expense Total expenses Operating income Income tax expense Net income 252,100 75,000 8,150 25,000 360,250 183,000 43,000 $ 140.000 8 Question #5 (continued) The following is additional information concerning Spoke's transactions during the year ended May 31, 2021:1 . . All sales during the year were made on account. All merchandise was purchased on account, making up the total accounts payable account. Capital assets costing $90,000 were purchased by paying $40,000 in cash and by issuing 5,000 shares of stock. The Other expenses" are related to prepaid items. All income taxes incurred during the year were paid during the year. In order to supplement its cash, Spoke issued 4,000 common shares at $10 per share. There were no penalties assessed for the retirement of bonds. Cash dividends of $115,000 were declared and paid at the end of the fiscal year. . . Required: Prepare a statement of cash flows for Spoke Inc. for the year ended May 31, 2021 using the indirect method. Spoke follows IFRS and has adopted the policy of classifying interest paid as operating and dividends paid as financing activities. 1.Prepare the operating activities section of the statement of cash flows (7 marks) Net earnings(loss) $140,000 Cash provided(used) by operating activities
