Question

Wildhorse Corporation, which uses IFRS, has contracted with you to prepare a statement of cash flows. The controller has provided the following information: December 31 2017 2016 Cash Accounts receivable Inventory FV-NI Investments Land Buildings Equipment Patent $39,320 $13,000 11,150 9,450 11,100 9,870 -0-2,550 5,000 5,000 -0 27,700 35,500 13,500 14,000 14,000 $116,070 $95,070 Allowance for doubtful accounts $1,400 $1,500 Accumulated depreciation-equipment ,200 3,800 -0 5,700 9,000 7,750 4,400 3,800 -0 6,000 Notes payable, short-term (non-trade) 3,400 4,000 30,970 24,520 43,000 33,000 21,700 5,000 $116,070 $95,070 Accumulated depreciation buildings Accumulated amortization-patent Accounts payable Dividends payable Long-term notes payable Share capital Retained earnings

Answer 1

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Part a	Cash Flow Statement
	Cash flows from operating activities
	Net earnings (1)		$     16,700
	Adjustments to reconcile net income to net
	cash provided by operating activities:
	Loss on sale of equipment (2)	$         2,550
	Gain from flood damage (23000-27700-5700)	$        -1,000
	Depreciation expense (3)	$         3,550
	Patent amortization	$         1,250
	Gain on sale of investment	$        -3,800
	Increase in accounts receivable (net)	$        -1,800
	Increase in inventory	$        -1,230
	Increase in accounts payable	$            600
	Interest paid included in earnings	$         2,200
	Dividends paid	$        -5,350	$      -3,030
	Net cash flow provided by operating activities		$     13,670
	Cash flows from investing activities
	Proceeds on sale of investments FV-NI	$         6,350
	Proceeds on sale of equipment	$         2,600
	Purchase of equipment	$     -16,500
	Proceeds from flood damage to building	$       23,000
	Net cash provided by investing activities		$     15,450
	Cash flows from financing activities
	Payment of interest	$        -2,200
	Payment of short-term note payable	$           -600
	Net cash used by financing activities		$      -2,800
	Increase in cash		$     26,320
	Cash, January 1, 2017		$     13,000
	Cash, December 31, 2017		$     39,320
Part a2	Supplemental disclosures of cash flow information:
	Cash paid during the year for:
	Income taxes		$        5,600
	Non-cash investing and financing activities:
	Retired note payable by issuing common shares	$       10,000
	Purchased equipment by issuing note payable	$       15,800	$     25,800
Working	Supporting Computations:
1	Ending retained earnings	$       21,700
	Beginning retained earnings	$        -5,000
	Net earnings	$       16,700
2	Cost of equipment sold	$       10,300
	Accumulated depreciation (50% X $10,300)	$        -5,150
	Carrying amount of equipment sold	$         5,150
	Proceeds from sale of equipment	$        -2,600
	Loss on sale of equipment	$         2,550
3	Accumulated depreciation on equipment sold	$         5,150
	Decrease in accumulated depreciation	$        -1,600
	Depreciation expense	$         3,550
Part b		2017	2016	change
	Building		$     27,700
	Accumulated depreciation		$      -5,700
	Equipment	$       35,500	$     13,500
	Accumulated depreciation	$         2,200	$      -3,800
		$       37,700	$     31,700	$6,000.00
	Depreciation expense	$         3,550
	Loss on sale of equipment	$         2,550
	Gain on flood damage	$        -1,000
	Proceeds on sale of equipment	$         2,600
	Purchase of equipment	$     -16,500
	Proceeds from insurance of building	$       23,000
		$       14,200