Georgian Ltd. Comparative Balance Sheet As of December 31 2024 2023 Cash 196,000 85,000 Investmentsat fair value

2024

2023

Cash

196,000

85,000

Investments—at fair value through profit or loss held for trading
purposes

22,000

18,000

Investments—at fair value through other
comprehensive income

62,000

55,000

Accounts receivable

66,000

42,000

Inventory

66,000

80,000

Prepaid expenses

10,000

14,000

Plant assets

575,000

425,000

Accumulated depreciation

(144,000)

(120,000)

Goodwill

42,000

57,000

$895,000

$656,000

Accounts payable

$33,000

$35,000

Accrued liabilities

37,000

32,000

Cash dividends payable

6,000

5,000

Bonds payable

66,000

62,000

Mortgage payable

—

104,000

Deferred income tax liability

2,000

4,000

Preferred shares

218,000

—

Ordinary shares

297,500

210,000

Retained earnings

228,500

204,000

Reserves

7,000

-

$895,000

$656,000

Sales

$763,000

Cost of sales

(412,000)

Gross profit

351,000

Interest expense, long-term

(7,000)

Depreciation expense

(40,000)

Operating expenses

(175,000)

Other gains and losses

(11,000)

Income before income tax

118,000

Income tax expense

(25,000)

Net income

93,000

Other comprehensive income:

Holding gain on at fair value through other comprehensive income securities

7,000

Comprehensive income

$100,000

Supplemental Information:

- During the year, Georgian exchanged 12,000 ordinary shares for plant assets having a fair value of $60,000.

- During the year, Georgian declared and issued a stock dividend of 5,500 ordinary shares. The transaction was valued at $27,500.

- During the year, goodwill was written down $15,000 to reflect a permanent impairment of the asset.

- 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.

- Georgian 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 recorded increase in the bonds payable account was due to the amortization of the discount.

- Georgian elects to record interest paid as an operating activity and dividends paid as a financing activity.

- During the year, Georgia sold equipment (plant assets) that originally cost $100,000 for $84,000 cash.

REQUIRED:

a. From the information above, prepare Georgian's statement of cash flows for the year ended December 31, 2024, using the indirect method.

b. Prepare Georgian's cash flows from operating activities for the year ended December 31, 2024, using the direct method.

c. Prepare note disclosure(s) for noncash transactions.

Answer rating: 100% (QA)

a Georgian Ltd Statement of Cash Flows For the year ended December 31 2024 Cash flows from operating activities Net income 93000 Adjustments to reconc... View the full answer