FAC 2122 Assignment Due Date: April 24, 2019 Instructions : Answer all questions Question 1 Arcade Corporation's balance sheet and income statement appear below: Income Statement Sales $723 Cost of goods sold 453 Gross margin 270 Selling and administrative expenses 163 Income before income taxes 107 Income tax expense 32 Net income $75 Balance Sheet Ending Balance Beginning Balance Cash $42 $36 Debtors 77 80 Inventories 54 58 Plant and equipment 581 480 less: accumulated depreciation (318) (294) Total Assets $436 $360 creditors $23 $28 Bonds payable 293 270 Common stock 61 60 Retained earnings 59 2 Total liabilities and equity $436 $360 The company did not dispose of any property, plant, and equipment, retire any bonds payable, or repurchase any of its own common stock during the year. The company declared and paid a cash dividend of $18. Required: Prepare a statement of cash flow . (10 marks) Question 2 Comparative Balance Sheet Shiner Corporation Assets Dec 31, 1996 Dec 31, 1995 Cash $37,000 $49,000 Accounts Receivable $26,000 $36,000 Prepaid Expenses $6,000 $0 Land $70,000 $0 Building $200,000 $0 Accumulated Depreciation $11,000 $189,000 $0 Equipment $68,000 $0 Accumulated Depreciation $10,000 $58,000 $0 Total Assets $386,000 $85,000 Liabilities and Stockholder Equity Accounts Payable $40,000 $5,000 Bonds Payable $150,000 $0 Common Stock $60,000 $0 Retained Earnings $136,000 $20,000 Total Liabilities and Stockholder Equity $386,000 $85,000 Income Statement Shiner Corporation Revenue $492,000 Operating Expenses $269,000 Depreciation $21,000 $290,000 Income before Income Taxes $202,000 Income Tax Expense $68,000 Net Income $134,000 Additional information: 1. During the year Shiner Corporation paid dividends of $18,000. 2. Shiner also issued $150,000 in bonds. Copy and complete the statement below: (15 marks) Statement of Cash Flows Cash Flow from Operating Activities Net Income Adjustments to reconcile net income to net cash Depreciation Accts Receivable decrease Prepaid Expense increase Accts Payable Increase Net cash provided from Operating Activities Investing Activities Land Purchase Building Purchase Equipment Purchase Financing Activities Dividend payment to shareholders Issuance of Bonds Payable Net Decrease in Cash Cash Jan 1, 1996 Cash Dec 31, 1996 Question 3 Caribbean Distributors Balance Sheet for Assets20102009 Cash 191 000 159 000 Debtors/Accounts Receivables 12 000 15 000 Stock/Inventory 170 000 160 000 Prepaid expenses 6 000 8 000 Land 140 000 80 000 Equipment 160 000 0 Accumulated depreciation – equipment (16 000) 0 Total 663 000 422 000 Liabilities and Shareholders Equity Trade creditors/Accounts Payable 52 000 60 000 Accrued expenses payable/owing 15 000 20 000 Income tax .

1. FAC 2122
Assignment
Due Date: April 24, 2019
Instructions : Answer all questions
Question 1
Arcade Corporation's balance sheet and income statement
appear below:
Income Statement
Sales
$723
Cost of goods sold
453
Gross margin
270
Selling and administrative expenses
163
Income before income taxes
107
Income tax expense
32
Net income
$75
Balance Sheet
Ending Balance
Beginning Balance
Cash
$42
$36
Debtors

2. 77
80
Inventories
54
58
Plant and equipment
581
480
less: accumulated depreciation
(318)
(294)
Total Assets
$436
$360
creditors
$23
$28
Bonds payable
293
270
Common stock
61
60
Retained earnings
59
2
Total liabilities and equity
$436
$360
The company did not dispose of any property, plant, and

3. equipment, retire any bonds payable, or repurchase any of its
own common stock during the year. The company declared and
paid a cash dividend of $18.
Required: Prepare a statement of cash flow . (10 marks)
Question 2
Comparative Balance Sheet
Shiner Corporation
Assets
Dec 31, 1996
Dec 31, 1995
Cash
$37,000
$49,000
Accounts Receivable
$26,000
$36,000
Prepaid Expenses
$6,000
$0
Land
$70,000
$0
Building
$200,000
$0
Accumulated Depreciation
$11,000
$189,000
$0
Equipment

4. $68,000
$0
Accumulated Depreciation
$10,000
$58,000
$0
Total Assets
$386,000
$85,000
Liabilities and Stockholder Equity
Accounts Payable
$40,000
$5,000
Bonds Payable
$150,000
$0
Common Stock
$60,000
$0
Retained Earnings
$136,000
$20,000
Total Liabilities and Stockholder Equity
$386,000
$85,000
Income Statement
Shiner Corporation
Revenue
$492,000
Operating Expenses
$269,000

5. Depreciation
$21,000
$290,000
Income before Income Taxes
$202,000
Income Tax Expense
$68,000
Net Income
$134,000
Additional information:
1. During the year Shiner Corporation paid dividends of
$18,000.
2. Shiner also issued $150,000 in bonds.
Copy and complete the statement below: (15 marks)
Statement of Cash Flows
Cash Flow from Operating Activities
Net Income
Adjustments to reconcile net income to net cash
Depreciation
Accts Receivable decrease

6. Prepaid Expense increase
Accts Payable Increase
Net cash provided from Operating Activities
Investing Activities
Land Purchase
Building Purchase
Equipment Purchase
Financing Activities
Dividend payment to shareholders
Issuance of Bonds Payable

7. Net Decrease in Cash
Cash Jan 1, 1996
Cash Dec 31, 1996
Question 3
Caribbean Distributors
Balance Sheet for
Assets20102009
Cash 191 000 159 000
Debtors/Accounts Receivables 12 000
15 000
Stock/Inventory 170 000 160
000
Prepaid expenses 6 000 8
000
Land 140 000 80 000
Equipment 160 000 0
Accumulated depreciation – equipment (16 000)
0
Total 663 000 422
000

8. Liabilities and Shareholders Equity
Trade creditors/Accounts Payable 52 000
60 000
Accrued expenses payable/owing 15 000
20 000
Income tax payable/owing 12 000
0
Bond payable/long term loan 130 000
0
Ordinary share/common stock 360 000 300
000
Retained earnings 94 000 42
000
Total 663 000 422
000
Caribbean Distributors
Income statement
For the year ended December 31 2010
$ $
Revenues
975 000
Cost of goods sold 660 000
Operating expenses (excluding depreciation) 176
000
Depreciation expense 18 000
Loss on sale of store equipment 1 000
855,000
Income before income taxes
120 000
Income taxes
36 000
Net income/profit
84 000

9. Additional information:
1. In 2005, the company declared and paid a $32 000 cash
dividend
2. Bonds/long term loans were issued at face value for $130 000
in cash
3. Equipment costing $20 000 was sold for $17 000 cash when
the book value of the equipment was $18 000
4. Common stock/ordinary shares of $60 000 was issued to
acquire land
Required: Prepare a cash flow statement for Caribbean
Distributers for the year ending December 31, 2010. (25 Marks)
Question 4
Part A
The following information is given for Tripp Company, which
uses the indirect method.
Net income $20,000
Depreciation expense 3,000
Increase in accounts receivable 2,000
Payment of dividends 2,000
Proceeds from sale of equipment 6,000
Increase in accounts payable 4,000
Decrease in inventory 3,000
From the information provided, answer the following questions:
a) The cash flow from operating activities is ________. (3
marks)
b) The cash flow from investing activities is ________. (1
mark)
c) The cash flow from financing activities is ________. ( 1
mark)

10. Part B
Avatar Company uses the indirect method to prepare its
statement of cash flows. Refer to the following information for
the year 2014.
Additional information provided:
• Equipment costing $52,000 was purchased for cash.
• Equipment with a net asset value of $10,000 was sold
for $14,000
• Depreciation expense of $12,000 was recorded during
the year.
• During 2014, the company repaid $40,000 of long-
term notes payable.
• During 2014, the company borrowed $34,000 on a
new note payable
• There were no stock retirements during the year.
• There were no sales of treasury stock during the year.
Prepare a complete statement of cash flows using the outline
given below : (20 marks)
Avatar Company

11. Statement of Cash Flows
Year Ended December 31, 2014
Operating activities:
Net income
Adjustments
Depreciation expense
Gain or loss on sale
Increase/decrease in current assets
Increase/decrease in current liabilities
Net cash from operating activities
Investing activities:
Proceeds from sale of assets
Acquisition of assets

12. Net cash from investing activities
Financing activities:
Issuance of stock
Purchase of treasury stock
Borrowing on notes payable
Repayments of notes payable
Payment of dividends
Net cash from financing activities
Net change in cash
Cash balance, December 31, 2013

13. Cash balance, December 31, 2014