The income statement for Whistler Ltd., a publicly traded company following IFRS, is presented here: WHISTLER LTD.

Question:

The income statement for Whistler Ltd., a publicly traded company following IFRS, is presented here:

WHISTLER LTD.

Income Statement

Year Ended November 30, 2015

Sales .............................................................. $8,000,000

Cost of goods sold ................................................5,000,000

Gross profit .........................................................3,000,000

Operating expenses ................................................2,000,000

Profit from operations ............................................1,000,000

Interest expense ......................................................100,000

Profit before income tax ............................................900,000

Income tax expense ..................................................300,000

Profit ...............................................................$ 600,000

Additional information:

1. Operating expenses include $75,000 of depreciation expense and a $100,000 impairment loss on property, plant, and equipment.

2. Accounts receivable increased by $190,000.

3. Merchandise inventory decreased by $50,000.

4. Prepaid expenses related to operating expenses increased by $40,000.

5. Accounts payable to suppliers of merchandise decreased by $180,000.

6. Accrued liabilities related to operating expenses decreased by $90,000.

7. Interest payable decreased by $10,000.

8. Unearned revenue that was received from customers decreased by $17,000.

9. Income tax payable increased by $20,000.

Instructions

(a) Prepare the operating activities section of the statement of cash flows, using either

(1) The indirect method

(2) The direct method, as assigned by your instructor.

(b) Would your answer in part (a) change if Whistler were a private company following ASPE?

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