Exam 5: Financial Position and Cash Flows

A company that follows ASPE

Which of the following is NOT a limitation of the statement of financial position?

Cash flows from investing activities Markle Corporation reports: Cash provided by operating activities.................................. \7 0,000 Cash used by financing activities.......................................... 35,000 Beginning cash balance....................................................... 17,500 Ending cash balance.......................................................... 95,000 What is Markle`s cash provided/(used) by investing activities?

Charlie's Inc. gives you the following information pertaining to the year 2020: Net sales............................................................ \9 25,000 Cost of goods sold.............................................. 575,000 Current assets.................................................... 525,000 Current liabilities.............................................. 275,500 Average total assets........................................... 1,000,000 Total liabilities.................................................. 650,000 Net income....................................................... 225,000 The rate of return on assets Charlie's Inc. is

Statement of financial position format The following statement of financial position has been submitted to you by an inexperienced bookkeeper. List your suggestions for improvements in the format of the statement of financial position. Consider both terminology deficiencies as well as classification inaccuracies. Note 1. The reserve for contingencies has been created by charges to earned surplus and has been established to provide a cushion for future uncertainties. Note 2. The inventory account includes only items physically present at the main plant and warehouse. Items located at the company's branch sales office, amounting to $30,000, are excluded since the company has consistently followed this procedure for many years.

Financial or capital market risks are related to

Use the following information for questions. Polis Corp.'s trial balance at December 31, 2020 is properly adjusted except for the income tax expense adjustment. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Polis Corp. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Trial Balance $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ December 31, 2020 Cash \3 37,500 Accounts receivable (net) 1,447,500 Inventory 1,192,500 Property, plant, and equipment (net) 4,183,000 Accounts payable and accrued liabilities \9 90,500 Income taxes payable 342,000 Future income tax liability 37,500 Common shares 1,675,000 Contributed surplus 1,340,000 Retained earnings, Jan 1,2020 2,325,000 Net sales and other revenues 6,180,00 Costs and expenses 5,040,000 Income tax expenses Other financial data for the year ended December 31, 2020: • Included in accounts receivable is $360,000 due from a customer and payable in quarterly instalments of $45,000. The last payment is due December 29, 2022. • The balance in the future income tax liability account relates to a temporary difference that arose in a prior year, of which $15,000 is classified as a current liability. • During the year, estimated tax payments of $330,000 were charged to income tax expense. The current and future tax rate on all types of income is 35 percent. -In Polis' December 31, 2020 statement of financial position, the final retained earnings balance is

Which of the following would NOT appear in the equity section of a statement of financial position?

In preparing a statement of cash flows under the INDIRECT method, cash flows from operating activities

In preparing a statement of cash flows, which of the following transactions would be considered an investing activity?

Free cash flow is calculated as net cash provided by operating activities less

Current assets Define current assets without using the word "asset."

Cash flows from operating activities – indirect method Titiki Ltd. had the following comparative statement of financial position: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Titiki Ltd. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Statement of Financial Position $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ As at December 31 Cash Accounts receivable Inventories Prepaid insurance Equipment Accumulated depreciation-equipment Total assets Accounts payable Wages payable Income taxes payable Long-term note payable Common shares Retained earnings Total liabilities and shareholders' equity \ 20,500 34,000 20,000 2,500 102,000 \ 23,000 4,000 2,000 4,000 30,000 65,000 \ 12,500 25,500 30,000 2,000 90,000 \ 20,000 2,000 3,000 5,000 34,500 65,000 Additional information: •Net income for the fiscal year was $13,500. •Equipment that cost $10,000 and was sold for a gain of $1,000 during 2020. The equipment’s accumulated depreciation was $7,000. Prepare the operating activities section of a statement of cash flows using the indirect method.

Cash provided (used) by operating activities Willows Corporation reports the following information: Net income..................................................... \3 20,000 Depreciation expense...................................... 70,000 Increase in accounts receivable....................... 30,000 What amount should Willows report under the cash provided (used) by operating activities portion of their statement of cash flows?

A company that follows IFRS

Statement of cash flows ratios Financial statements for Comet Ltd. are presented below: At the beginning of 2020, the accounts payable balance was $21,000, and the bonds payable balance was $9,000. All of Comet’s bonds have been issued at par. Instructions Calculate the following for Comet Ltd.: a) Current cash debt coverage ratio b) Cash debt coverage ratio c) Free cash flow

The statement of cash flows reports all of the following EXCEPT

Use the following information for questions. Polis Corp.'s trial balance at December 31, 2020 is properly adjusted except for the income tax expense adjustment. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Polis Corp. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Trial Balance $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ December 31, 2020 Cash \3 37,500 Accounts receivable (net) 1,447,500 Inventory 1,192,500 Property, plant, and equipment (net) 4,183,000 Accounts payable and accrued liabilities \9 90,500 Income taxes payable 342,000 Future income tax liability 37,500 Common shares 1,675,000 Contributed surplus 1,340,000 Retained earnings, Jan 1,2020 2,325,000 Net sales and other revenues 6,180,00 Costs and expenses 5,040,000 Income tax expenses Other financial data for the year ended December 31, 2020: • Included in accounts receivable is $360,000 due from a customer and payable in quarterly instalments of $45,000. The last payment is due December 29, 2022. • The balance in the future income tax liability account relates to a temporary difference that arose in a prior year, of which $15,000 is classified as a current liability. • During the year, estimated tax payments of $330,000 were charged to income tax expense. The current and future tax rate on all types of income is 35 percent. -In Polis' December 31, 2020 statement of financial position, the current assets total is

Statement of cash flows - indirect method Titiki Ltd. had the following comparative statement of financial position: $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Titiki Ltd. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Statement of Financial Position $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ As at December 31 Cash Accounts receivable Inventories Prepaid insurance Equipment Accumulated depreciation-equipment Total assets Accounts payable Wages payable Interest payable Income taxes payable Long-term note payable Common shares Retained earnings Total liabilities and shareholders' equity \ 20,500 34,000 20,000 2,500 102,000 \ 23,000 4,000 2,000 4,000 30,000 65,000 \ \ 12,500 25,500 30,000 2,000 90,000 \ 20,000 2,000 3,000 5,000 34,500 65,000 Additional information: -Net income for the fiscal year was $13,500. -Equipment that cost $10,000 and was sold for a gain of $1,000 during 2020. The equipment's accumulated depreciation was $7,000. Prepare the statement of cash flows using the indirect format.

Monetary assets include