Canadian accounting: Viking Corp. Balance Sheet Dec 31 Viking Corp. Income State
ID: 2590813 • Letter: C
Question
Canadian accounting:
Viking Corp.
Balance Sheet Dec 31
Viking Corp.
Income Statement
Year ended Dec 31, 20x9
Other Information:
- The company exchanged shares for land having a value of $100,000
- The company disposed of equipment costing $80,000
- During the year, the company acquired $29,000 in additional FVTOCI investments for cash.
- Land having a cost of $60,000 was disposed of during the year
Required –
(a) Prepare the cash flow from operation section of the Statement of Cash Flow using the indirect method.
(b) Prepare the cash flow from operation section of the Statement of Cash Flow using the direct method.
(c) Prepare the cash flow from investing section of the Statement of Cash Flow.
(d) What is the amount of cash dividends paid for the year ended December 31, 20x9.
Viking Corp.
Balance Sheet Dec 31
20x9 20x8 Cash 100,000 42,000 Accounts Receivable 68,000 33,500 Allowance for doubtful accounts (8,000) (3,500) Inventory 120,000 140,000 Prepaid Expenses 9,000 12,000 Land 120,000 80,000 Building 75,000 60,000 Equipment 300,000 280,000 Accumulated depreciation (165,000) (142,000) FVTICI Investments 95,000 75,000 Patents 112,000 88,000 $826,000 $665,000 Accounts payable 63,000 42,000 Wages payable 16,000 18,000 Unearned revenue 35,000 60,000 Bonds payable 100,500 124,860 Common Stock 240,000 140,000 Retained earnings 367,500 286,140 A*OCI-FVTOCI Investments 4,000 (6,000) $826,000 $665,000Explanation / Answer
1. Cash flow from operations (Indirect Method)
Particulars
Amount
Total Amount
Cash Flow from Operating Activities
Net Income
281,000
Add: Items for cash basis
Gain on FVTOCI
(19,000)
Depreciation
88,000
Patent Amortization
22,000
Loss on sale of Land
42,000
Gain on sale of Equipment
(32,000)
Accounts Receivable (Increase) (68,000 -8,000)- (33,500-3,500)
(30,000)
Inventory(Decrease) (140,000 – 120,000)
20,000
Prepaid Expenses(Decrease)
3,000
Accounts Payable (Increase) (63,000-42,000)
21,000
Wages Payable (Decrease) (18,000 – 16,000)
(2,000)
Unearned Revenue (decrease) (60,000 – 35,000)
(25,000)
Cash Flow from operating activities
369,000
NOTE: Dear Student, due to time limit I am not ablle to complete other remaining parts but I will provide the solution for them asap i submit this answer.
2. Cash Flow from Operating Activities (Direct Method)
Particulars
Amount
Cash received on sales (Note1)
1,482,700
Less: COGS (Note 2)
686,850
Less: Wages paid in cash (See Note 3)
118,000
Less: Interest Expense
19,500
Less: Insurance Paid (33,000 – 3,000 for prepaid expense reversal)
30,000
Less: Property Tax
28,600
Less: Sales & general
56,000
Less: Income Tax expense
174,750
Net Cash from operations
369,000
NOTE: Dear Student, Kindly ask as many queries as you can point out. Direct Method is a little difficult one. So kindly leave comment in case of query.
Note 1: Accounts Receivable Account
Particulars
Amount
Particulars
Amount
Opening Balance
33,500
Allowance for Bad debt (Note 4)
4,800
Sales (Sales – Unearned Revenue)
(1547,000 – 25,000)
1,522,000
Cash Received (Balancing Figure)
1,482,700
Closing Balance
68,000
Note 2: Inventory
Particulars
Amount
Particulars
Amount
Opening Balance
140,000
Purchases (Balancing Figure)
707,850
Cost of goods Sold
727,850
Closing Balance
120,000
Accounts Payable
Particulars
Amount
Particulars
Amount
Opening Balance
42,000
Cash Paid (Balancing Figure)
686850
Purchases
707,850
Closing Balance
63,000
Note 3: Wages Payable
Accounts Payable
Particulars
Amount
Particulars
Amount
Opening Balance
18,000
Cash Paid (Balancing Figure)
118,000
Wage Expense
116,000
Closing Balance
16,000
3. Cash from Investing Activity
Cash Flow from Investing Activates
Sale of Land (60,000 – 42,000)
18,000
Purchase of Building (75,000 – 60,000)
(15,000)
Purchase of Equipment (Note 2)
(100,000)
Sale of Equipment (Note 3)
47,000
Patents (Note 4)
(46,000)
Sale of Equipment
14,000
Purchase of FVTOCI
(29,000)
Cash Used by Investing activity
(111,000)
Note 1: Land Account
Particulars
Amount
Particulars
Amount
Opening Balance
80,000
Sale
60,000
Purchase of Land for shares
100,000
Closing Balance
120,000
Note 2: Accumulated Depreciation
Particulars
Amount
Particulars
Amount
Opening Balance
142,000
Depreciation reversed on sale of equipment
65,000
Depreciation
88,000
Closing Balance
165,000
Equipment Account
Particulars
Amount
Particulars
Amount
Opening Balance
280,000
Sale of Equipment
80,000
Purchase of Equipment
100,000
Closing Balance
300,000
Note 3: Calculation of Sale price of equipment
Sale Price = Gross Value – Accumulated Depreciation + Profit on sale
= 80,000 – 65,000 + 32,000 = $47,000
Note 4: Patents Account
Particulars
Amount
Particulars
Amount
Opening Balance
88,000
Amortization
22,000
Purchase
46,000
Closing Balance
112,000
4. Total Cash dividends paid
Total Cash Dividends = Opening Balance of retained earnings + Net income of the year - Closing balance of retained earnings
= 286,140 + 281,000 - 367,500 = $199,640
Particulars
Amount
Total Amount
Cash Flow from Operating Activities
Net Income
281,000
Add: Items for cash basis
Gain on FVTOCI
(19,000)
Depreciation
88,000
Patent Amortization
22,000
Loss on sale of Land
42,000
Gain on sale of Equipment
(32,000)
Accounts Receivable (Increase) (68,000 -8,000)- (33,500-3,500)
(30,000)
Inventory(Decrease) (140,000 – 120,000)
20,000
Prepaid Expenses(Decrease)
3,000
Accounts Payable (Increase) (63,000-42,000)
21,000
Wages Payable (Decrease) (18,000 – 16,000)
(2,000)
Unearned Revenue (decrease) (60,000 – 35,000)
(25,000)
Cash Flow from operating activities
369,000
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