The income statement for Whistler Ltd., a publicly traded company following IFRS, is presented here: WHISTLER LTD.

Question:

The income statement for Whistler Ltd., a publicly traded company following IFRS, is presented here:

WHISTLER LTD.

Income Statement

Year Ended November 30, 2012

Sales.............................................................$8,000,000

Cost of goods sold..............................................5,000,000

Gross profit......................................................3,000,000

Operating expenses.............................................2,000,000

Profit from operations..........................................1,000,000

Interest expense...................................................100,000

Profit before income tax..........................................900,000

Income tax expense...............................................300,000

Profit.............................................................$ 600,000

Additional information:

1. Operating expenses include $75,000 of depreciation expense and a $100,000 impairment loss on property, plant, and equipment.

2. Accounts receivable increased by $190,000.

3. Merchandise inventory decreased by $50,000.

4. Prepaid expenses related to operating expenses increased by $40,000.

5. Accounts payable to suppliers of merchandise decreased by $180,000.

6. Accrued liabilities related to operating expenses decreased by $90,000.

7. Interest payable decreased by $10,000.

8. Income tax payable increased by $20,000.

Instructions

(a) Prepare the operating activities section of the statement of cash flows, using either (1) the indirect method or (2) the direct method, as assigned by your instructor.

(b) Would your answer in (a) change if Whistler were a private company following ASPE?

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...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For  book-img-for-question

Financial Accounting Tools for Business Decision Making

ISBN: 978-1118024492

5th Canadian edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso, Barbara Trenholm, Wayne Irvine

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