Question One

Given the following account information for Howard Corporation, prepare a balance sheet in report form for the company as of December 31, 2020. All accounts have normal balances. Assume Howard uses IFRS.

Equipment........................................................................................ 60,000

Interest Expense.............................................................................. 2,400

Interest Payable............................................................................... 600

Retained Earnings, beginning.......................................................... 113,200

Dividends.......................................................................................... 50,400

Land.................................................................................................. 137,320

Accounts Receivable....................................................................... 102,000

Bonds Payable................................................................................. 78,000

Accumulated other comprehensive income .. 19,000

Notes Payable (due in 6 months).................................................... 29,400

Common Stock................................................................................ 70,000

Accumulated DepreciationEquip.................................................. 10,000

Prepaid Advertising.......................................................................... 5,000

Service Revenue.............................................................................. 341,400

Buildings........................................................................................... 80,400

Supplies............................................................................................ 1,860

Income Taxes Payable.................................................................... 3,000

Utilities Expense............................................................................... 1,320

Advertising Expense........................................................................ 1,560

Salaries and Wages Expense.......................................................... 53,040

Salaries and Wages Payable........................................................... 900

Accumulated Depr. Bldg.................................................................. 20,000

Cash................................................................................................. 45,000

Depreciation Expense...................................................................... 8,000

Investment in Bonds to be held to maturity 100,000

FV-OCI Investments (Fair value = 16,000). 12,000

FV-NI Investments 3,200

Assets held for sale .. 22,000

Cash is comprised of $50,000 at RBC and a bank overdraft of $5,000 at BMO.

Question 2

The controller of Nebula Corporation has provided you with the following information:

Nebula Corporation

Income Statement

For the Year Ended December 31, 2020

Net sales.................................................................................................. 620,000

Operating expenses................................................................................ 410,000

Income from operations.......................................................................... 210,000

Other revenues and expenses

Gain on sale of equipment............................................................... 30,000

Interest expense............................................................................... 8,000 22,000

Income before income taxes................................................................... 232,000

Income taxes........................................................................................... 92,800

Net income.............................................................................................. 139,200

Nebula Corporation

Comparative Account Information

Relating to Operations

For the Year Ended December 31, 2020

2020 2019

Accounts receivable 56,000 40,000

Prepaid insurance 5,000 6,000

Accounts payable 59,000 47,000

Interest payable 600 1,500

Income taxes payable 4,200 6,000

Unearned revenue 20,000 14,000

Instructions

1. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020, using the direct method.
2. Prepare a statement of cash flows (for operating activities only) for the year ended December 31, 2020 using the indirect method.