Each of the following items must be considered in preparing a statement of cash flows (indirect method)

Question:

Each of the following items must be considered in preparing a statement of cash flows (indirect method) for Bastille Inc., which uses ASPE, for the year ended December 31, 2014.

1. Plant assets that cost $40,000 six years before and were being depreciated on a straight-line basis over 10 years with no estimated residual value were sold for $5,300.

2. During the year, 10,000 common shares were issued for $41 cash per share.

3. Uncollectible accounts receivable in the amount of $27,000 were written off against the allowance for doubtful accounts.

4. The company sustained a net loss for the year of $10,000. Depreciation amounted to $22,000. A gain of $9,000 was reported on the sale of land for $39,000 cash.

5. A three-month Canadian treasury bill was purchased for $50,000 on November 13, 2014. The company uses a cash and cash-equivalent basis for its statement of cash flows.

6. Patent amortization for the year was $18,000.

7. The company exchanged common shares for a 40% interest in TransCo Corp. for $900,000.

8. The company accrued an unrealized loss on investments accounted for at FV-NI.

Instructions

Identify where each item is reported in the statement of cash flows, if at all.

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-1118300855

10th Canadian Edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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