Question
Whiskey Industries Ltd., a Nanaimo, British Columbiabased company, has a December 31 year end. The companys comparative statement of financial position and its statement of
Whiskey Industries Ltd., a Nanaimo, British Columbiabased company, has a December 31 year end. The companys comparative statement of financial position and its statement of income for the most recent fiscal year are presented here, along with some additional information:
1. | During the year, Whiskey Industries sold, for $470 cash, equipment that had an original cost of $940 and a net carrying amount of $190. | |
2. | Whiskey Industries borrowed an additional $7,520 by issuing notes payable in 2020. | |
3. | During the year, the company purchased a piece of land for a future manufacturing site for $188,000. The land was purchased with no money down and the company entered into a mortgage payable for the full amount. |
WHISKEY INDUSTRIES LTD. Statement of Financial Position As at December 31, 2020 | |||||
2020 | 2019 | ||||
Assets | |||||
Current assets | |||||
Cash | $5,690 | $18,330 | |||
Accounts receivable | 9,400 | 18,800 | |||
Prepaid rent | 560 | 470 | |||
Inventory | 37,600 | 28,200 | |||
Total current assets | 53,250 | 65,800 | |||
Manufacturing equipment | 149,460 | 94,000 | |||
Accumulated depreciation, manufacturing equipment | (65,050 | ) | (47,000 | ) | |
Land | 188,000 | 0 | |||
Total assets | $325,660 | $112,800 | |||
Liabilities and shareholders equity | |||||
Current liabilities | |||||
Accounts payable | $10,340 | $5,640 | |||
Wages payable | 560 | 380 | |||
Dividends payable | 440 | 280 | |||
Total current liabilities | 11,340 | 6,300 | |||
Mortgage payable | 188,000 | 0 | |||
Notes payable | 43,240 | 37,600 | |||
Common shares | 27,260 | 23,500 | |||
Retained earnings | 55,820 | 45,400 | |||
Total liabilities and shareholders equity | $325,660 | $112,800 |
WHISKEY INDUSTRIES LTD. Statement of Income For the year ended December 31, 2020 | |||
Sales | $122,200 | ||
Cost of goods sold | 75,200 | ||
Gross margin | 47,000 | ||
Expenses | |||
Rent expense | 6,670 | ||
Wages expense | 9,020 | ||
Depreciation expense | 18,800 | ||
Interest expense | 560 | ||
Income tax expense | 490 | ||
Gain on sale of equipment | (280) | ||
Net income | $11,740 |
(a)
Using the information above, prepare the statement of cash flows for Whiskey Industries Ltd. for the year ended December 31, 2020, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Supplementary disclosures: | |||||
Cash paid for interest | $ | ||||
Cash paid for income tax | $ |
Non-cash investing and financing activities: During the year, land with a value of $ was acquired by signing a mortgage payable for the full amount.
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