Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The financial statements of Wetaskiwin Ltd., a private company reporting under ASPE, follow: WETASKIWIN LTD. Balance Sheet December 31 Assets 2021 Cash $9,000 Short-term notes

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
The financial statements of Wetaskiwin Ltd., a private company reporting under ASPE, follow: WETASKIWIN LTD. Balance Sheet December 31 Assets 2021 Cash $9,000 Short-term notes receivable 14,000 Accounts receivable 28,000 Inventory 29,000 Property, plant, and equipment 73,000 Accumulated depreciation (30,000) Total assets $123,000 Liabilities and Shareholders' Equity Accounts payable $25,000 Income tax payable 3,000 Notes payable 15,000 Common shares 25,000 Retained earnings 55,000 Total liabilities and shareholders' equity $123,000 2020 $10,000 23,000 14,000 25,000 78,000 (24,000) $126,000 $43,000 20,000 10,000 25,000 28,000 $126,000 $286,000 194,000 92,000 WETASKIWIN LTD. Income Statement Year Ended December 31, 2021 Sales Cost of goods sold Gross profit Operating expenses $38,000 Loss on sale of equipment 2,000 Profit from operations Other revenues and expenses Interest revenue $(1.000) Interest expense 2.000 Proht before income tax Income tax expense Profit 40,000 52.000 1.000 51,000 15,000 $36,000 Additional information: 1. Short-term notes receivable are loans to other companies. During the year, the company collected the outstanding balance at December 31, 2020, and made new loans in the amount of $14,000 2. Equipment was sold during the year. This equipment cost $15,000 originally and had a carrying amount of $10,000 at the time of sale. 3. Equipment costing $10,000 was purchased in exchange for a $10,000 note payable. 4. Depreciation expense is included in operating expenses. 5. Accounts receivable are from the sale of merchandise on credit 6. Accounts payable relate to the purchase of merchandise on credit Prepare a cash flow statement for the year using the Indirect method. (Show amounts that decrease cash flow with either a signes -15,000 or in parenthesses (15,000L 1 WETASKIWIN LTD. Cash Flow Statement-Indirect Method Year Ended December 31, 2021 Operating Activities Profit Adjustments to reconcile profit to Net Cash Provided by Operating Activities Depreciation Expense Loss on Sale of Equipment Decrease in Accounts Payable Decrease in Income Tax Payable Increase in Accounts Receivable Increase in Inventory WW Net Cash Provided by Operating Activities Investing Activities Sale of Equipment Net Cash Used by Investing Activities Financing Activities TYS.LUDO SSUIDO Net Cash Used by Investing Activities Financing Activities Issue of Notes Receivable Payment of Cash Dividends Net Cash Used by Financing Activities , Net Increase in Cash Cash, January 1 10000 Cash, December 31 9000 Note: Equipment costing $ 10000 was purchased by issuing a note payable

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo

2nd Edition

1618533134, 9781618533357

More Books

Students also viewed these Accounting questions

Question

=+43-3 Discuss how stress makes us more vulnerable to disease.

Answered: 1 week ago

Question

What is the Easterlin Paradox?

Answered: 1 week ago