Financial statements for Nackawic Inc. follow: Additional information: 1. Long-term investments were sold for $5,000, resulting in
Question:
Financial statements for Nackawic Inc. follow:
Additional information:
1. Long-term investments were sold for $5,000, resulting in a realized loss of $7,500.
2. New equipment costing $141,000 was purchased for $71,000 cash and a $70,000 bank loan payable.
3. Equipment costing $56,000 was sold for $15,550, resulting in a gain of $8,750.
4. Accounts payable relate to merchandise creditors; accrued liabilities relate to operating expenses.
5. A dividend was paid during the year.
6. Operating expenses include $58,700 of depreciation expense and an $8,750 gain on sale of equipment.
Instructions
(a) Prepare the statement of cash flows, using either (1) the indirect method or (2) the direct method, as assigned by your instructor.
(b) Nackawic's cash position increased by 75 percent between 2011 and 2012. Identify the primary reason(s) for this significant increase.
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Financial Accounting Tools for Business Decision Making
ISBN: 978-1118024492
5th Canadian edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine