Refer to the information presented in PA-33.Data from PA-33VHL reported

Refer to the information presented in PA-33.

Data from PA-33

  • VHL reported income before income taxes of $400,000. Current income tax expense was $40,000; deferred income tax expense was $10,000.
  • Retained earnings increased $340,000 for the year; the dividends payable account increased $5,000.
  • Current income taxes payable decreased $4,000; deferred income taxes payable increased $6,000.
  • Interest expense for the year was $20,000; the interest payable account increased $12,000.
  • Accounts receivable decreased $18,000 and accounts payable increased $40,000 during the year.
  • Inventory increased $14,000.
  • VHL sold equipment with a net book value of $40,000 for $42,000 cash.
  • VHL sold at fair value through other comprehensive income investments for $12,000. The book value of the investment was $15,000.
  • Depreciation expense for the year totalled $22,000.
  • VHL recorded a goodwill impairment loss of $15,000.
  • Acquired $200,000 in equipment by way of a $20,000 cash down payment and a $180,000 finance lease.


Required:
Prepare the cash flows from operating activities section of the cash flow statement using the indirect method assuming that Valley Hospitality Ltd. is a private enterprise that elects to report its financial results in accordance with ASPE.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...


Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Business Tutors
Ask questions directly from Qualified Online Business Tutors .
Best for online homework assistance.