The following information is provided for Carla?s Cleaning Company:

Additional information:

1. Profit for 2021 was $110,625.

2. Common shares were issued for $53,750.

3. Land with a cost of $53,750 was sold at a loss of $20,300.

4. Purchased land with a cost of $113,000 with a $58,750 down payment and financed the remainder with a mortgage note payable.

5. No equipment was sold during 2021.

6. Net sales for the year were $675,600.

7. Cost of goods sold for the year was $401,800.

8. Operating costs, including depreciation expense, were $99,700.

9. Interest expense was $6,300.

10. Income tax expense was $36,875.

11. Accounts payable is used for merchandise purchases.

Instructions

Prepare a cash flow statement for the year using the direct method.

Taking It Further

Indicate what transactions might be classifi ed diff erently if the company were reporting under IFRS instead of ASPE.

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CARLA'S CLEANING COMPANY Balance Sheet May 31 Assets 2021 2020 Cash $ 28,175 $ 47,750 Accounts receivable 90,050 79,750 160,750 Inventory Prepaid expenses 188,000 6,300 7,800 Land 140,750 81,500 Equipment Accumulated depreciation-equipment 323,000 203,000 (81,200) S695,075 (40,750) Total assets $539,800 Liabilities and Shareholders' Equity $ 43,450 $ 40,750 Accounts payable Dividends payable Income taxes payable Mortgage payable 7,800 6,300 3,500 7,300 135,000 80,750 Common shares 220,500 166,750 Retained earnings 284,825 237,950 Total liabilities and shareholders' equity $695,075 $539,800