Apollo Inc. (Apollo) is a company that owns used car dealerships in the province of Saskatchewan....

  

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Apollo Inc. (Apollo) is a company that owns used car dealerships in the province of Saskatchewan. Apollo is a private company that reports under ASPE. The balance sheet, income statement, and an excerpt of notes from the financial statements prepared by the financial reporting department are as follows: Apollo Inc. Balance sheet At December 31 Assets Cash and cash equivalents Accounts receivable Inventory Investments Property, plant, and equipment Goodwill Total assets Liabilities Accounts payable Salaries payable Income tax payable Bank loan Total liabilities Shareholders' equity Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity Note 1 Note 4 2021 $ 22,330 $ 15,600 945,670 7,850 $ Note 2 1,450,400 1,330,600 Note 3 37,000 43,000 $2,478,850 $2,226,950 2020 35,780 18,950 786,320 12,300 178,870 202,620 13,760 $ 16,780 3,500 9,750 6,490 3,980 153,870 184,380 300,000 300,000 Note 5 1,976,230 1,742,570 $2,276,230 $2,042,570 $2,478,850 $2,226,950 Apollo Inc. Income statement For the year ended December 31, 2021 Sales Cost of sales Salaries expense Interest expense Amortization and depreciation Goodwill impairment Investment gain on sale Income before income taxes Income tax expense Net income $2,688,350 (2,150,680) 537,670 (92,440) (7,670) (62,200) (6,000) 3,450 372,810 (93,200) $ 279,610 Note 1: All investments are held for trading, and therefore they are recorded at fair value through profit or loss. There were no fair value adjustments required at December 31, 2021. Note 2: During 2021, Apollo purchased new office furniture and made significant renovations to its head office at a total cost of $182,000. Property, plant, and equipment is presented net of accumulated depreciation. Note 3: The goodwill relates to the acquisition of Nordberg Otto Inc., a small car dealership in Moose Jaw in 2014. As the sales from this small dealership have not been in line with the expected sales, an impairment loss on the goodwill was recorded. Note 4: During 2021, Apollo obtained a new bank loan to help finance its office renovations. No principal loan repayments were made during 2021. Note 5: All dividends that were declared in 2021 were paid prior to the year end. Required: Prepare Apollo's cash flow statement using the indirect method for the year ending December 31, 2021. (12.5 marks) Apollo Inc. (Apollo) is a company that owns used car dealerships in the province of Saskatchewan. Apollo is a private company that reports under ASPE. The balance sheet, income statement, and an excerpt of notes from the financial statements prepared by the financial reporting department are as follows: Apollo Inc. Balance sheet At December 31 Assets Cash and cash equivalents Accounts receivable Inventory Investments Property, plant, and equipment Goodwill Total assets Liabilities Accounts payable Salaries payable Income tax payable Bank loan Total liabilities Shareholders' equity Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity Note 1 Note 4 2021 $ 22,330 $ 15,600 945,670 7,850 $ Note 2 1,450,400 1,330,600 Note 3 37,000 43,000 $2,478,850 $2,226,950 2020 35,780 18,950 786,320 12,300 178,870 202,620 13,760 $ 16,780 3,500 9,750 6,490 3,980 153,870 184,380 300,000 300,000 Note 5 1,976,230 1,742,570 $2,276,230 $2,042,570 $2,478,850 $2,226,950 Apollo Inc. Income statement For the year ended December 31, 2021 Sales Cost of sales Salaries expense Interest expense Amortization and depreciation Goodwill impairment Investment gain on sale Income before income taxes Income tax expense Net income $2,688,350 (2,150,680) 537,670 (92,440) (7,670) (62,200) (6,000) 3,450 372,810 (93,200) $ 279,610 Note 1: All investments are held for trading, and therefore they are recorded at fair value through profit or loss. There were no fair value adjustments required at December 31, 2021. Note 2: During 2021, Apollo purchased new office furniture and made significant renovations to its head office at a total cost of $182,000. Property, plant, and equipment is presented net of accumulated depreciation. Note 3: The goodwill relates to the acquisition of Nordberg Otto Inc., a small car dealership in Moose Jaw in 2014. As the sales from this small dealership have not been in line with the expected sales, an impairment loss on the goodwill was recorded. Note 4: During 2021, Apollo obtained a new bank loan to help finance its office renovations. No principal loan repayments were made during 2021. Note 5: All dividends that were declared in 2021 were paid prior to the year end. Required: Prepare Apollo's cash flow statement using the indirect method for the year ending December 31, 2021. (12.5 marks)

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Apollo Inc Statement of Cash Flows Indirect method For the Year Ended December 31 2021 Cash flows fr... View the full answer