Question

As the accountant for Awesome Foods Incorporated, you are responsible for preparing the cash flow statement. You have decided to prepare the statement using the indirect method and have gathered the following data from the accounting records Principal payments on non-current debt$ 50,000 Collections on accounts receivable287,500 Increase in accounts payable24,300 Acquisition of equipment by issuing non-current note payable70,000 Depreciation expense71,300 Collection of loan principal58,000 Proceeds from sale of investments, not including $5,100 gain49,100 Increase in accounts receivable7,200 Cash payments to purchase capital assets62,000 Decrease in accrued liabilities 30,600 Payment of cash dividends46,500 Income tax expense and payments39,300 Proceeds from sale of capital assets, not including $7,400 loss22,600 Net income147,100 Cash sales217,400 Proceeds from issuance of common shares 300,000 Increase in inventory41,700 Loan to another company60,000 Bonds payable converted into common shares130,000 Payments to suppliers 283,100 Decrease in prepaid expenses12,800 Cash balance: December 31, 201662,500 Cash balance: December 31, 2017452,000

Answer 1

$147,100 AWESOME FOODS Statement of Cash flows (Indirect method) Cash flows from Operating Activities Net Profit Adjustments to reconcile net profit to net cash provided by Operating Activities Depreciation expense $71,300 Gain on sale of investments -$5,100 Loss on sale of capital assets $7,400 Change in operating current assets and liabilities Increase in Accounts receivable -$7,200 Increase in Inventory -$41,700 Decrease in prepaid expenses $12,800 Increase in Accounts payable $24,300 Decrease in accrued liabilities -$30,600 $31,200 $178,300 $49,100 $22,600 -$62,000 $9,700 Net Cash from Operating Activities Cash flows from Investing Activities Sale of Investments Sale of capital assets Purchase of Capital assets Net Cash from Investing Activities Cash flows from Financing Activities Principal payment on non current debt Loan to another company Collection of loan principal Issue of common shares Cash dividend paid Net Cash from Financing Activities Net increase (decrease) in cash Cash balance at beginning of the year Cash balance at end of the year -$50,000 -$60,000 $58,000 $300,000 $46,500 $201,500 $389,500 $62,500 $452,000 Non-cash investing and financing activities: Acquisition of equipment by issue of non current note payable Bonds payable converted into common shares $70,000 $130,000 Credit Date a Oct 1 2019 Debit $150,000 General Journal Equipment Cash 8% note payable Interest expense Interest payable $15,000 $135,000 $2,700 Dec 31 2019 $2,700 $135,000 June 30 8% note payable 2020 Cash $135,000 June 30 Interest payable 2020 Interest expense Cash $2,700 $5,400 $8,100 b Current liabilities December 31st, 2019 Notes payable Interest payable Total Current Liabilities $135,000 $2,700 $137,700