Question

Question 2 (30 marks) Unit 9 - Statement of Cash Flow 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 principa158,000 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 liabilities30,600 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 I Cash sales217,400 Proceeds from issuance of common shares300,000 Increase in inventory41,700 Loan to another company 60,000 Bonds payable converted into common shares130,000 Payments to suppliers283,100 Decrease in prepaid expenses12,800 Cash balance: December 31, 201662,500 Cash balance: December 31, 2017452,000 Prepare the cash flow statement for the year ended December 31, 2017, using the indirect method.

Answer 1

89 Awesome Foods Incorporated Cash flow statement Indirect Method Particulars Amount ($) , Amont (5) Net Income 147,100 (I) Cath flow from obrating Activities! Add: NON- cash and Now - obrating it Depreciation Expenses Loss on sale of capital assest (22600 - '7400) 300 15200 les! Now-Cash and Non-oprating Items Profit on sale of Investment (49400 - 5100) (44000) 189600 Fund from obration Adjustment of changes in working cup. Increase in Account payable facovecese eis Account Receivable Decrease in Accrued liability Increase in Inventory Decorecte in prepaid "expenses Activities 24,300 7200) (306oo) (41700) 12800 147200 139300) cash ftow from obrating activities les "Ancome Tax paid during the year Cash-flow from Opaling Activities 107900 107900

Amounts) Amount (& Particulars (II) Cash Flow From Investing Activity Purchase of capital casset 5100 (62000) Proceeds from sale of Ismestment Proceeds from sale of ceepital anset 7400 (49500) (III) Cost frow from Financing Activities Proceeds from 4&fueuice of common stock 300,000 Bonds payables converted into common stock 130000 Payment of Non-current debts (50000) Collection of loans principle Payment of cash dividend (46500) loan to another company (60,000) 58000 3,31,500 Balance Add cash from begnings carth & cash equivalent 3,89,900 62500 452you