Bridgeport Inc., a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The company is currently preparing its statement of cash flows and follows the policy of classifying interest paid as operating cash flows and dividends paid as financing cash flows. The comparative statement of financial position and income statement for Bridgeport as of May 31, 2020, are as follows: BRIDGEPORT INC. Statement of Financial Position As at May 31 Current assets 2020 2019 Cash $34.790 $20,650 Accounts receivable 77,560 56,360 Inventory 188,930 199.740 Prepaid expenses 8,950 7,810 Total current assets 310,230 284,560 Plant assets 599,500 507,500 Less: Accumulated depreciation 150,650 122,650 Net plant assets 448,850 384,850 Total assets $759,080 $669,410 Current liabilities Accounts payable Salaries and wages payable Interest payable $120.760 61.300 25.860 $115.760 72,810 23,340 BRIDGEPORT INC. Statement of Financial Position As at May 31 Current assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Plant assets Less: Accumulated depreciation Net plant assets Total assets 2020 $34,790 77,560 188,930 8,950 310,230 599,500 150,650 448,850 $759.080 2019 $20,650 56,360 199,740 7,810 284,560 507,500 122,650 384,850 $669,410 Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities Mortgage payable Total liabilities Shareholders' equity Common shares Retained earnings Total shareholders' equity $120.760 61.300 25,860 207.920 80,300 288,220 $115.760 72,810 23.340 211,910 106,000 317.910 336,450 134.410 470,860 280,000 71.500 351,500 Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities Mortgage payable Total liabilities Shareholders' equity Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $120,760 61,300 25,860 207,920 80,300 288,220 $115,760 72,810 23,340 211,910 106,000 317,910 336,450 134,410 470,860 $759.080 280,000 71,500 351,500 $669.410 BRIDGEPORT INC. Income Statement For the Year Ended May 31, 2020 Sales Cost of goods sold Gross margin Expenses Salaries and wages expense Interest expense Other operating expenses Depreciation expense $ 1,339,370 814,000 525,370 200,000 66,400 23.000 28.000 Total $ 1,339,370 814,000 525,370 BRIDGEPORT INC. Income Statement For the Year Ended May 31, 2020 Sales Cost of goods sold Gross margin Expenses Salaries and wages expense Interest expense Other operating expenses Depreciation expense Total operating expenses Operating income Income tax expense Net earnings 200,000 66,400 23,000 28,000 317,400 207.970 66,400 141,570 The following is additional information about transactions during the year ended May 31, 2020, for Bridgeport Inc., which follows IFRS 1. 2. 3. Plant assets costing $92,000 were purchased by paying $54.000 in cash and issuing 5.000 common shares. The other expenses relate to prepaid items In order to supplement its cash, Bridgeport issued 4.000 additional common shares There were no penalties assessed for the repayment of the mortgage. Cash dividends of $78,660 were declared and paid at the end of the fiscal year, 5. The following is additional information about transactions during the year ended May 31, 2020, for Bridgeport Inc. which follows IFRS 1. 2 3. Plant assets costing $92,000 were purchased by paying $54,000 in cash and issuing 5,000 common shares. The other expenses" relate to prepaid items. In order to supplement its cash, Bridgeport issued 4,000 additional common shares. There were no penalties assessed for the repayment of the mortgage. Cash dividends of $78,660 were declared and paid at the end of the fiscal year. 5. Prepare a statement of cash flows for Bridgeport Inc. for the year ended May 31, 2020, using the direct method. (Show amounts that decrease cash flow with either a - signes. -15,000 or in parenthesis es (15,000)
