Exercise 13-7 The comparative unclassified statement of financial position for O
ID: 2587006 • Letter: E
Question
Exercise 13-7
The comparative unclassified statement of financial position for Oriole Ltd. follows:
$53,000
$22,000
88,000
61,500
182,000
193,500
74,000
100,000
300,000
182,000
(64,000
)
(34,000
)
$633,000
$525,000
$39,000
$ 45,000
204,000
173,000
195,000
171,000
195,000
136,000
$633,000
$525,000
Additional information:
( a) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Statement of Financial Position
December 31 Assets 2018 2017 Cash
$53,000
$22,000
Accounts receivable88,000
61,500
Inventory182,000
193,500
Long-term investments74,000
100,000
Equipment300,000
182,000
Accumulated depreciation(64,000
)
(34,000
)
Total assets$633,000
$525,000
Liabilities and Shareholders’ Equity Accounts payable$39,000
$ 45,000
Bank loan payable204,000
173,000
Common shares195,000
171,000
Retained earnings195,000
136,000
Total liabilities and shareholders’ equity$633,000
$525,000
Explanation / Answer
Statement of cash flow Cash flow from operating activities Net income for the year 119,000 Adjustments to reconcile net income Depreciation expense 30,000 Gain on sale of investment -5,000 increase in accounts receivable -26500 Decrease in inventory 11500 decrease in accounts payable -6000 Net cash flow from operating activities 123,000 123,000 cash flow from investing activities cash from sale of investment 31,000 Cash paid for purchase of Equipment -118,000 Cash used by investing activities -87,000 -87,000 Cash from financing activities bank loan paid -31,000 Cash from bank loan 62,000 common shares issued for cash 24,000 Cash dividend paid -60,000 Cash from financing activities -5,000 -5,000 Net increase in cash 31,000 cash at the beginning 22,000 cash at year end 53,000
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