Luke and Angie Inc.s financial statements as at December 31, 2016, appear below: Supplemental financial information for


Luke and Angie Inc.€™s financial statements as at December 31, 2016, appear below:

Luke and Angie Inc. Comparative Balance Sheet As at December 31, 2015 and 2016 2016 2015 $ 85,000 $ 102,000 Cash Investm

Luke and Angie Inc. Statement of Comprehensive Income For the Year Ended December 31, 2016 Sales $860,000 Cost of sales

Supplemental financial information for the year ended December 31, 2016:

  • Luke and Angie exchanged 1,500 preferred shares for plant assets having a fair value of $150,000.
  • Luke and Angie declared and issued 1,000 ordinary shares as a stock dividend valued at $10,000.
  • Goodwill was determined to be impaired and was written down $40,000.
  • Luke and Angie paid $10,000 cash and signed a finance lease for $90,000 to acquire plant assets with a fair market value of $100,000.
  • Luke and Angie sold equipment (plant assets) with a net book value of $70,000 for $80,000 cash.
  • Luke and Angie did not buy or sell any at fair value through profit or loss or at fair value through other comprehensive income securities during the year. The at fair value through profit or loss securities have been designated as cash equivalents.
  • Financial asset at amortized cost securities with a book value of $10,000 were called for redemption during the year; $11,000 cash was received.
  • The recorded decrease in the bonds payable account was due to the amortization of the premium.
  • The deferred income tax liability represents temporary differences relating to the use of capital cost allowance for income tax reporting and straight-line depreciation for financial statement reporting.
  • Luke and Angie elects to record interest and dividends paid as an operating activity.

a. From the information provided, prepare Luke and Angie€™s statement of cash flows for the year ended December 31, 2016, using the indirect method.
b. Prepare note disclosure(s) for non-cash transactions.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Intermediate Accounting

ISBN: 9787300071374

3rd Edition Vol. 1

Authors: Kin Lo, George Fisher

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