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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).)

ORIOLE LTD.
Statement of Financial Position
December 31
Assets 2018 2017 Cash

$53,000

$22,000

Accounts receivable

88,000

61,500

Inventory

182,000

193,500

Long-term investments

74,000

100,000

Equipment

300,000

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 payable

204,000

173,000

Common shares

195,000

171,000

Retained earnings

195,000

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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