The comparative balance sheet for Storm Adventures Ltd., a private company reporting under ASPE, follows

Additional information:

1. Profit for 2021 was $69,900.

2. Bonds payable of $60,000 were retired at maturity.

3. Common shares were issued for $40,000.

4. Land was sold at a loss of $10,000.

5. No equipment was sold during 2021.

6. Net sales for the year were $678,000.

7. Cost of goods sold for the year was $439,800.

8. Operating expenses (not including depreciation expense) were $80,000.

9. Interest expense was $5,000.

10. Income tax expense was $23,300.

Instructions

Prepare a cash flow statement using either (a) the indirect method or (b) the direct method, as assigned by your instructor.

Transcribed Image Text:

STORM ADVENTURES LTD. Balance Sheet December 31 Assets 2021 2020 Cash $ 43,000 $ 12,600 Accounts receivable 76,000 85,000 172,000 Inventory Prepaid expenses 160,000 12,000 5,000 Land 50,000 75,000 Equipment Accumulated depreciation 270,000 190,000 (90,000) (40,000) Total assets $521,000 $499,600 Liabilities and Shareholders' Equity $ 43,000 $ 38,000 Accounts payable Dividends payable Income taxes payable Bonds payable 7,500 5,000 2,500 6,000 120,000 180,000 Common shares 207,000 167,000 Retained earnings 141,000 103,600 Total liabilities and shareholders' equity $521,000 $499,600