King Corp., a private company reporting under ASPE, reported the following for the years ended July 31, 2021, and 2020:

Additional information:

1. Profit for 2021 was $106,500.

2. Common shares were issued for $35,000.

3. Land with a cost of $60,000 was sold at a gain of $30,000; $55,000 cash was received and a note receivable was issued for the remainder.

4. Purchased land with a cost of $100,000 with cash.

5. Equipment with a cost of $25,000 and carrying value of $20,000 was sold for $14,000 cash.

6. Equipment was purchased with cash.

Instructions

Prepare a cash fl ow statement for the year using the indirect method.

Taking It Further

Is it favourable for a company to have a net cash inflow from financing activities?

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KING CORP. Balance Sheet July 31 Assets 2021 2020 $ 24,200 Cash $ 11,000 Accounts receivable Inventory Prepaid expenses 92,000 106,000 202,000 190,000 7,500 6,000 Note receivable 40,000 5,000 Land 145,000 105,000 Equipment 225,000 170,000 Accumulated depreciation (81,000) (35,000) Total assets $668,700 $544,000 Liabilities and Shareholders' Equity $ 33,000 $ 42,000 Accounts payable Salaries payable Income taxes payable Mortgage note payable 6,500 3,800 6,000 65,000 1,500 80,000 Common shares 185,000 150,000 Retained earnings Total liabilities and shareholders' equity 373,200 266,700 $668,700 $544,000