Quick answer please with solutions

Q16

MUST BE PREPARED UNDER DIRECT METHOD, READ QUESTION CAREFULLY

The net changes in the statement of financial position accounts of Brown Derby Corp. for calendar 2020 are shown below. Brown Derby adheres to IFRS.

Account

Cash.................................................................................................. Increased $ 92,000

Long term FV-NI investments....................................................... Decreased 121,000

Accounts receivable........................................................................ Increased 73,200

Allowance for doubtful accounts................................................... Increased 13,300

Inventory........................................................................................... Increased 74,200

Prepaid expenses........................................................................... Decreased 22,800

short-term investment (100% owned subsidiary)....................... decreased 20,000

Plant and equipment....................................................................... increased 235,000

Accumulated depreciation............................................................. Increased 155,000

Accounts payable............................................................................ Decreased 80,700

Accrued liabilities............................................................................ Increased 16,500

Deferred tax liability........................................................................ Decreased 15,500

Long-term bonds............................................................................. Increased 80,000

Common shares.............................................................................. Increased 240,000

Retained earnings........................................................................... Decreased 98,000

Other information regarding the corporations 2020 year:

An analysis of the Retained Earnings account shows:

Retained earnings, December 31, 2019...................................... $ 1,300,000

Net income for the year ended Dec 31, 2020 ............................ 287,000

Retained earnings, December 31, 2020...................................... $ 1,202,000

1. On January 2, 2020, FV-NI investments costing $ 121,000 were sold for $ 150,000.

2. The company declare and paid cash dividend on February 1, 2020

3. The company declare and distributed stock dividend on August 1, 2020 amount of $240,000 was debited to RE

4. Major repairs of $ 25,000 to the equipment were debited to the Plant and Equipment account during the year, repairs paid by cash.

5. At January 1, 2020, the cash balance was $ 136,000.

6. Long-term bonds were issued at par.

Instructions

Using proper cash flow format, prepare a statement of cash flows using the direct method for calendar 2020. Assuming the net cash flow from operating activities is $242,000 and it is calculated correctly.