The professional simulation for this chapter asks you to address questions related to the accounting for the statement of cashflows.

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e KwW Professional Simulation 口回麗 Statement of Cash Flows Time Remaining 1 hour 00 minutes DerectionsSltuationFinancial Statoments Erplanation Resoures Ellwood House, Inc. had the following condensed statement of financial position at the end of 2010. ELLWOOD HOUSE, INC. Statement of Financial Position December 31, 2010 Land Plant assets Investments Current assets (non-cash) Cash 38,500 57,500 40,000 34,000 10,000 Share capital-ordinary Retained eamings Long-term notes payable Bonds payable 80,000 23,500 30,000 32,000 14,500 Current liabilities $180,000 $180,000 During 2011, the following occured. 1. Ellwood House, Inc., sold part of its investment portfolio, which was classified as non-trading equity for $15,500, resulting in a gain of $500 for the firm. 2. Dividends totaling $19,000 were paid to shareholders. 3. A parcel of land was purchased for $5,500. 4. $20,000 of ordinary shares were issued at par. 5. $10,000 of bonds payable were retired at par 6. Heavy equipment was purchased through the issuance of $32,000 of bonds. 7. Net income for 2011 was $42,000 after allowing depreciation of $13,550. 8. Both current assets (other than cash) and current liabilities remained at the same amount. DiroctionsStuation Fihancial Statomonts Explanation Resouroes Prepare a statement of cash flows for 2011, using the indirect method. reations Stuation Finonolal Stntomonis Draft a one-page letter to Gerald Brauer, president of Ellwood House, Inc., briefly explaining the changes within each major cash flow category. Refer to your cash flow statement whenever necessary