Question

AP5-7B (Preparation of statement of cash flows) Canbuild Materials Ltd. is a family-run do-it-yourself building materials company located on Pelee Island, Ontario. The company produces high-quality building materials for the do-it-yourselfers. The company's bookkeeper has gone on holiday and the company has brought you in to help it prepare its monthly finan financing. You have correctly completed the statement of financial position and the statement of income statement. You only have the statement of cash flows left to prepare based on the following information: cial statement package, which the bank requires as part of the terms of the loan

Answer 1

a)

CANBUILD MATERIALS LTD
Statement of Cash flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Net Income		$   168,000
Adjustments to reconcile net income to ;
Income statement items not affecting cash
Depreciation expense	$      98,000
Changes in current operating assets and liabilities
Decrease in accounts receivable	$   (69,000)
Decrease in inventory	$      20,000
Increase in accounts payable	$        2,000
Total adjustments		$      51,000
Net cash provided by operating activities		$   219,000
Cash flows from investing activities
Cash received from sale of equipment	$      25,000
Cash paid for purchase of Equipment	$ (138,000)
Net cash used by investing activities		$ (113,000)
Cash flows from financing activities
Cash paid for dividends	$ (136,000)
Net cash used by financing activities		$ (136,000)
Net Decrease in cash and cash equivalents		$   (30,000)
Cash and cash equivalents at beginning of period		$      50,000
Cash and cash equivalents at end of period		$      20,000

CANBUILD MATERIALS LTD
Statement of Cash flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Cash received from customers	$ 1,176,000
Cash paid to suppliers	$   (633,000)
Wages paid	$   (221,000)
Administrative expenses paid	$     (46,000)
Advertising expenses paid	$     (45,000)
Interest expenses paid	$     (12,000)
Net cash provided by operating activities		$ 219,000

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