Problem 13-2A a The income statement for Ivanhoe Ltd., a private company followi
ID: 2560831 • Letter: P
Question
Problem 13-2A a
The income statement for Ivanhoe Ltd., a private company following ASPE, is presented here:
Additional information:
(a)
(a) Prepare the operating activities section of the statement of cash flows, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
IVANHOE LTD.
Statement of Cash Flows (Partial)-Indirect Method
Year Ended November 30, 2018
Operating activities
Adjustments to reconcile net income to
IVANHOE LTD.Income Statement
Year Ended November 30, 2018 Sales $8,100,000 Cost of goods sold 4,300,000 Gross profit 3,800,000 Operating expenses 2,040,000 Income from operations 1,760,000 Interest expense 150,000 Income before income tax 1,610,000 Income tax expense 400,000 Net income $1,210,000
Explanation / Answer
Net Income 1210000 Adjustmetns to reconcile Net income Depreciation 79000 Impairment loss 103000 182000 Changes in working capital Increases in Account receivable -187000 Inventory decreased by 55000 Prepaid exp increases -42000 Accounts payable decreases -189000 Accured liability -90000 Interest payable decreases -10000 Increases in income tax payable 28000 Unearned revenue decreases 21000 -414000 Net cash flows from operating activity 978000