Problem 13-2A a The income statement for Ivanhoe Ltd., a private company followi
ID: 2587021 • 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
IVANHOE LTD. Statement of Cash Flows (Partial)-Indirect Method Year Ended November 30, 2018 Operating activities Net Income $12,10,000 Adjustments to reconcile net income to Depreciation and amortization $79,000 Loss on property, plant, and equipment. $1,03,000 Increase in trade receivables -$1,87,000 Decrease in inventories $55,000 Increase in prepaid expenses -$42,000 Decrease in trade payables -$1,89,000 Decrease in accrued liabilities -$90,000 Decrease in interest payable -$10,000 Decrease in unearned revenue -$21,000 Increase in income tax payable $28,000 cash generated from Operating activities $9,36,000