Part III. Prepare statement of cash flows (indirect method) and answer questions (P13-6B)The comparative, unclassified statement of financial position for Anderson Ltd. shows thefollowing balances at December 31:AssetsCashAccounts receivableInventoryLandBuildingsAccumulated depreciation-buildingsEquipmentAccumulated depreciation equipmentTotal assetsLiabilities and Shareholders' EquityBank overdraftAccounts payableIncome tax payableInterest payableBank loan payable-current portionBank loan payable-non-current portionCommon sharesRetained earningsTotal liabilities and shareholders' equityAdditional information regarding 2018:1. Net income was $53,000.S2018-0-$ 36,00038,00020,00049,00035,00095,000110,000477,000263,000(67,000)(100,000)135,00040,000(18,000)(10,000)$709,000 $394,000S 5,0009,0003,0006,00026,000520,00090,00050,000$709,0002017S-0-35,0002,0007,00020,000212,00088,00030,000$394,000 Additional information regarding 2018:1. Net income was $53,000.2.A gain of $14,000 was recorded on the disposal of a small parcel of land. No land waspurchased during the year.3.A gain on disposal of $28,000 was recorded when an old building was sold for $40,000cash. A new building was purchased for $304,000 and depreciation expense on buildingsfor the year was $45,000.4. Equipment costing $125,000 was purchased while a loss of $5,000 was recorded onequipment that originally cost $30,000 and was sold for $4,000.5. The company took out $350,000 of new bank loans during the year.6. Dividends were declared and paid during the year.7. Common shares were issued for $10,000. Some common shares were also reacquired atthe price at which they were originally issued.Instructions(a) Prepare the statement of cash flows using the indirect approach.(b) Anderson Ltd.'s cash position decreased to zero. Identify the primary reason for thissignificant decrease.(c) The company's banker is worried. Why?

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Description: Part III. Prepare statement of cash flows (indirect method) and answer questions (P13-6B)The comparative, unclassified statement of financial position for Anderson Ltd. shows thefollowing balances at December 31:AssetsCashAccounts receivableInventor

Cash flow statement ta statement which define cash inflows and outflows of a firm during a period of…

Business

Accounting

Part III. Prepare statement of cash flows (indirect method) and answer questions (P13-6B) The comparative, unclassified statement of financial position for Anderson Ltd. shows the Following balances at December 31: Assets Cash Accounts receivable Inventory Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation equipment Total assets Liabilities and Shareholders' Equity Bank overdraft Accounts payable Income tax payable Interest payable Bank loan payable-current portion Bank loan payable-non-current portion Common shares Retained earnings Total liabilities and shareholders' equity S 2018 -0- 38,000 49,000 95,000 477,000 (67,000) 135,000 (18,000) $709,000 S 5,000 9,000 3,000 6,000 26,000 520,000 90,000 50,000 $709,000 2017 $ 36,000 20,000 35,000 110,000 S 263,000 (100,000) 40,000 (10,000) $394,000 -0- 35,000 2,000 7,000 20,000 212,000 88,000 30,000 $394,000

Part III. Prepare statement of cash flows (indirect method) and answer questions (P13-6B) The comparative, unclassified statement of financial position for Anderson Ltd. shows the Following balances at December 31: Assets Cash Accounts receivable Inventory Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation equipment Total assets Liabilities and Shareholders' Equity Bank overdraft Accounts payable Income tax payable Interest payable Bank loan payable-current portion Bank loan payable-non-current portion Common shares Retained earnings Total liabilities and shareholders' equity S 2018 -0- 38,000 49,000 95,000 477,000 (67,000) 135,000 (18,000) $709,000 S 5,000 9,000 3,000 6,000 26,000 520,000 90,000 50,000 $709,000 2017 $ 36,000 20,000 35,000 110,000 S 263,000 (100,000) 40,000 (10,000) $394,000 -0- 35,000 2,000 7,000 20,000 212,000 88,000 30,000 $394,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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