Financial statements of Waterloo Brewing Ltd. Base your answers to the following questions on the 2021 financial statements for Waterloo Brewing Ltd. in Exhibits 1.28A

In the questions below, the year 2021 refers to Waterloo Brewing’s fiscal year ended January 31, 2021, and the year 2020 refers to the prior year ended January 31, 2020.

Required 

a. Waterloo Brewing’s financial statements do not include the word “consolidated” in their title. What does this tell you about the company’s structure? 

b. Waterloo Brewing prepared a classified statement of financial position. Calculate the difference between current assets and current liabilities at the end of 2021, and at the end of 2020. This amount is referred to as working capital. Did the company’s working capital improve in 2021? Explain. 

c. Find the following amounts in Waterloo Brewing’s statements: 

i. Revenues in 2021 

ii. Cost of sales in 2021 

iii. Gross profit (as a dollar amount and as a percentage) in 2021 

iv. Selling, marketing, and administration expenses in 2020 

v. Income tax expense in 2020 vi. Net income in 2021 

vii. Intangible assets at the end of 2021 

viii. Accounts receivable at the beginning of 2021 

ix. Share capital at the end of 2021 

x. Property, plant, and equipment at the end of 2021 

xi. Cash flows from operating activities in 2021 

xii. Cash payments to purchase property, plant, and equipment in 2021 

xiii. Cash used for the payment of dividends in 2021 

d. Did Waterloo Brewing finance the company’s assets mainly from creditors (total liabilities) or from shareholders (shareholders’ equity) in 2021? Support your answer with appropriate calculations.

e. List the two largest sources of cash and the two largest uses of cash in 2021. (Consider cash generated from operating activities to be a single source or use of cash.) 

f. Suggest some reasons why Waterloo Brewing’s net income was $3,000,013 in 2021, yet cash provided by operating activities was $12,877,105.

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Statements of Financial Position As at January 31, 2021 and January 31, 2020 Notes Assets Current assets Accounts receivable Inventories Prepaid expenses Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Construction deposits Total Assets Liabilities and Equity Current liabilities Non-current liabilities Provisions Lease liabilities Long-term debt Deferred income tax liability Bank indebtedness 11 Accounts payable and accrued liabilities 12 Current portion of lease liabilities 13 Non-revolving demand loans 14 Current portion of long-term debt 15 Total Liabilities Equity 6 7 Share capital Share-based payments reserves Deficit Total Equity Commitments Total Liabilities and Equity 8 9 10 16 13 15 17 18 19 26 January 31, 2021 $ 9,871,061 14,344,496 729,260 24,944,817 46,630,107 26,936,861 15,002,826 1,949,074 90,518,868 $115,463,685 $ 3,366,489 21,341,335 3,282,080 25,896,379 510,275 54,396,558 1,019,962 21,522,379 1,367,930 3,462,495 27,372,766 81,769,324 39,546,216 2,245,415 (8,097,270) 33,694,361 $115,463,685 January 31, 2020 [recast - note 3.6] $ 4,976,226 10,482,912 787,448 16,246,586 32,808,678 27,840,996 15,184,333 1,050,425 76,884,432 $93,131,018 $ 783,077 12,909,771 2,869,733 13,748,967 687,836 30,999,384 958,025 23,226,137 1,852,023 2,208,947 28,245,132 59,244,516 39,126,283 2,108,671 (7,348,452) 33,886,502 $93,131,018