Use the attached financial statements below and the additional information to prepare a Statement of Cash Flows using the indirect method. Mistletoe Inc. Statement of Financial Position As at December 31st, 2021 Assets 2021 2020 Current Cash $78,200 $39,000 FVPL Investments 110,600 54,000 Accounts receivable 144,000 72,000 Allowance for doubtful accounts (32,000) (21,000) Inventory 90,000 117,000 Total current assets $390,800 $261,000 Long-Term Assets Land $180,000 $144,000 Buildings 315,000 270,000 Equipment 264,000 185,000 Accumulated depreciation (130,000) (164,000) Total long-term assets 629,000 435,000 Total assets $1,019,800 $696,000 Liabilities and Shareholders’ Equity Current liabilities Accounts payable $45,000 $72,000 Income tax payable 32,400 27,000 Deferred tax liability 81,000 72,000 Total current liabilities 158,400 171,000 Bonds payable (net of discount) 174,600 171,000 Total liabilities $343,000 $342,000 Shareholders’ Equity Common shares $340,000 $93,000 Retained earnings 346,800 261,000 Total Shareholders’ Equity 686,800 354,000 Total Liabilities and Shareholders’ Equity $1,019,800 $696,000 Mistletoe Inc. Income Statement For the year ended December 31st, 2021 Sales $1,200,000 Cost of goods sold 900,000 Gross profit 300,000 Operating expenses 342,200 Operating income (42,200) Non-operating items: Unrealized loss on FVPL investment 5,400 Interest on bond payable 25,200 Gain on sale of land and building (234,000) Total non-operating items (203,400) Income before tax expense 161,200 Tax expense 54,000 Net income $107,200 Additional Information: On January 1, 2021, the company sold its original land and building and purchased a new parcel of land, which also had a suitable building. The original land and building had a net book value of $324,000 at the time of sale. The value of the new land acquired was $180,000. No fair value through profit or loss (FVPL) investments were sold during the year. Operating expenses includes selling and administrative expenses, bad debt expense and depreciation. Selling and Admin expenses totalled $275,200 and were paid in cash. There were no accounts receivables were written off throughout the year. The company acquired equipment by issuing shares for $50,000 and the remainder was paid in cash. The company repurchased common shares for $125,000 cash throughout the year. All other shares issued were issued for cash. The company has elected to record dividends paid as financing activities and interest expense as operating activities. The change in the Bond Payable account is due to the amortization of the bond discount throughout the year. Bonds payable are shown net of the discount on the balance sheet. Required: Prepare the summary statement of cash flows using the indirect method

Use the attached financial statements below and the additional information to prepare a Statement of Cash Flows using the indirect method. Mistletoe Inc. Statement of Financial Position As at December 31st, 2021 Assets 2021 2020 Current Cash $78,200 $39,000 FVPL Investments 110,600 54,000 Accounts receivable 144,000 72,000 Allowance for doubtful accounts (32,000) (21,000) Inventory 90,000 117,000 Total current assets $390,800 $261,000 Long-Term Assets Land $180,000 $144,000 Buildings 315,000 270,000 Equipment 264,000 185,000 Accumulated depreciation (130,000) (164,000) Total long-term assets 629,000 435,000 Total assets $1,019,800 $696,000 Liabilities and Shareholders’ Equity Current liabilities Accounts payable $45,000 $72,000 Income tax payable 32,400 27,000 Deferred tax liability 81,000 72,000 Total current liabilities 158,400 171,000 Bonds payable (net of discount) 174,600 171,000 Total liabilities $343,000 $342,000 Shareholders’ Equity Common shares $340,000 $93,000 Retained earnings 346,800 261,000 Total Shareholders’ Equity 686,800 354,000 Total Liabilities and Shareholders’ Equity $1,019,800 $696,000 Mistletoe Inc. Income Statement For the year ended December 31st, 2021 Sales $1,200,000 Cost of goods sold 900,000 Gross profit 300,000 Operating expenses 342,200 Operating income (42,200) Non-operating items: Unrealized loss on FVPL investment 5,400 Interest on bond payable 25,200 Gain on sale of land and building (234,000) Total non-operating items (203,400) Income before tax expense 161,200 Tax expense 54,000 Net income $107,200 Additional Information: On January 1, 2021, the company sold its original land and building and purchased a new parcel of land, which also had a suitable building. The original land and building had a net book value of $324,000 at the time of sale. The value of the new land acquired was $180,000. No fair value through profit or loss (FVPL) investments were sold during the year. Operating expenses includes selling and administrative expenses, bad debt expense and depreciation. Selling and Admin expenses totalled $275,200 and were paid in cash. There were no accounts receivables were written off throughout the year. The company acquired equipment by issuing shares for $50,000 and the remainder was paid in cash. The company repurchased common shares for $125,000 cash throughout the year. All other shares issued were issued for cash. The company has elected to record dividends paid as financing activities and interest expense as operating activities. The change in the Bond Payable account is due to the amortization of the bond discount throughout the year. Bonds payable are shown net of the discount on the balance sheet. Required: Prepare the summary statement of cash flows using the indirect method

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 30BEB

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Question

Use the attached financial statements below and the additional information to prepare a Statement of Cash Flows using the indirect method.

Mistletoe Inc.

Statement of Financial Position

As at December 31^st, 2021

Assets	2021	2020
Current
Cash	$78,200	$39,000
FVPL Investments	110,600	54,000
Accounts receivable	144,000	72,000
Allowance for doubtful accounts	(32,000)	(21,000)
Inventory	90,000	117,000
Total current assets	$390,800	$261,000
Long-Term Assets
Land	$180,000	$144,000
Buildings	315,000	270,000
Equipment	264,000	185,000
Accumulated depreciation	(130,000)	(164,000)
Total long-term assets	629,000	435,000
Total assets	$1,019,800	$696,000

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$45,000	$72,000
Income tax payable	32,400	27,000
Deferred tax liability	81,000	72,000
Total current liabilities	158,400	171,000
Bonds payable (net of discount)	174,600	171,000
Total liabilities	$343,000	$342,000

Shareholders’ Equity
Common shares	$340,000	$93,000
Retained earnings	346,800	261,000
Total Shareholders’ Equity	686,800	354,000
Total Liabilities and Shareholders’ Equity	$1,019,800	$696,000

Mistletoe Inc.

Income Statement

For the year ended December 31^st, 2021

Sales		$1,200,000
Cost of goods sold		900,000
Gross profit		300,000
Operating expenses		342,200
Operating income		(42,200)
Non-operating items:
Unrealized loss on FVPL investment	5,400
Interest on bond payable	25,200
Gain on sale of land and building	(234,000)
Total non-operating items		(203,400)
Income before tax expense		161,200
Tax expense		54,000
Net income		$107,200

Additional Information:

On January 1, 2021, the company sold its original land and building and purchased a new parcel of land, which also had a suitable building. The original land and building had a net book value of $324,000 at the time of sale.
The value of the new land acquired was $180,000.
No fair value through profit or loss (FVPL) investments were sold during the year.
Operating expenses includes selling and administrative expenses, bad debt expense and depreciation. Selling and Admin expenses totalled $275,200 and were paid in cash.
There were no accounts receivables were written off throughout the year.
The company acquired equipment by issuing shares for $50,000 and the remainder was paid in cash.
The company repurchased common shares for $125,000 cash throughout the year. All other shares issued were issued for cash.
The company has elected to record dividends paid as financing activities and interest expense as operating activities.
The change in the Bond Payable account is due to the amortization of the bond discount throughout the year. Bonds payable are shown net of the discount on the balance sheet.

Required:

Prepare the summary statement of cash flows using the indirect method

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