Question

Asha Inc.’s financial statements for its year ended December 31, 20X8, follow:

Asha Inc.
Statement of financial position
as at December 31, 20X8
	20X8	20X7
Assets
Cash and cash equivalent	$94,000	$123,000
Accounts receivable (net)	114,000	111,500
FVOCI investments	15,000	12,000
Inventory	69,000	73,800
Prepaid expenses	15,000	11,700
Property, plant, and equipment (PPE), net	622,000	425,000
Trademark	48,000	63,000
	$977,000	$820,000
Liabilities and shareholder equity
Accounts payable	$62,100	$57,500
Income taxes payable	21,100	19,000
Dividends payable	15,000	18,000
Bank loan	295,300	215,600
Bonds payable	210,000	212,000
	$603,500	$522,100
Common shares	$128,000	$121,000
Preferred shares	125,000	100,000
Accumulated other comprehensive income	17,000	18,000
Retained earnings	103,500	58,900
	$373,500	$297,900
	$977,000	$820,000

Asha Inc.
Statement of comprehensive income
Year ended December 31, 20X8
Profit or loss
Sales revenue	$1,250,000
Cost of goods sold	522,000
Gross profit	728,000
Operating expenses	$322,000
Interest expense	30,400
Depreciation expense	120,000
Impairment loss — trademark	18,000
Gain on disposal of equipment	(5,000)
	$485,400
Profit or loss before tax	242,600
Income tax expense	92,300
Net income	$150,300
Other comprehensive income
Holding loss on investment at FVOCI	(1,000)
Other comprehensive income	(1,000)
Comprehensive income	$149,300

Other information:

• Asha reports its financial results in accordance with IFRS. It elects to report interest and dividends received as investing activities and interest and dividends paid as financing activities.
• Asha did not sell any investments at FVOCI during the year.
• Asha issued $10,000 in preferred shares in exchange for equipment value at $10,000.
• The bonds payable were previously issued at a premium; $2,000 of the premium was amortized in 20X8.
• Asha expended money during the year successfully defending its trademark.
• Equipment with a net book value of $16,000 was sold during the year.

What are Asha’s net cash flows from investing activities for its year ended December 31, 20X8?

Question options:

a	$305,000 outflow
b	$306,000 outflow
c	$309,000 outflow
d	$314,000 outflow

Answer 1

A)Purchased PPE

=Opening-depreciation-closing

=4,25,000 -120000-622000

=317000(outflow)

B) Trade mark Purchased

= Opening-impairment loss - closing

=63000-18000-48000

=3000(outflow)

C) FVOCI purchases

= Opening- loss-closing

= 12000-1000-15000

=4000(outflow)

D) Trade mark purchases

=Opening-impairment loss - closing

=63000-18000-48000

=3000(outflow)

E) inflow from sale of equipment

= 16000+5000

=21000(inflow)

Net cash flow from investing activities.

= A+B+C+D-E

= 306000(outflow)

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