Question

	WALLIS CORPORATION
	Statement of Financial Position
	As at December 31, 2014
Assets	2014	2013
Cash	$88,600	$49,100
Accounts receivable	85,000	59,400
Prepaid insurance	70,000	60,000
Total current assets	243,600	168,500
Property, equipment and vehicles	360,000	305,000
Accumulated depreciation	-110,400	-105,900
Total non-current assets	249,600	199,100
Total Assets	$493,200	$367,600
Liabilities and Shareholders' Equity
Accounts payable	$21,500	$18,600
Wages Payable	3,000	4,000
Total current liabilities	24,500	22,600
Bank loan payable	50,000	60,000
Total liabilities	74,500	82,600
Common Shares	200,000	200,000
Retained Earnings	218,700	85,000
Total Shareholders’ Equity	418,700	285,000
Total Liabilities & Shareholders' Equity	$493,200	$367,600
	WALLIS CORPORATION
	Income Statement
	For the Year Ended December 31, 2014
Moving revenue		$450,000
Gain on Sale of Equipment		5,000
Total revenues		$455,000
Expenses:
Depreciation expense	59,500
Wage expense	134,000
Vehicle maintenance expense	102,400
Interest expense	5,400	301,300
Net income		$153,700

Additional data:

      (1) Vehicles originally costing $65,000 were sold for $15,000.

      (2) Dividends were paid during the year.

1.A. Using the Indirect method, compute the adjustments to Net Income prior to the non-cash working capital adjustments.

(Note: an amount in brackets indicates a negative amount) The Wallis Corporation provides moving services to local clients and reported the following data for 2014:

a. $208,200

b. $213,200

c. $89,200

d. $210,200

1.B. Cash Flow from (or used by) Operating Activities for Wallis Corporation is?

a. (147,800)

b. $182,300

c. $165,900

d. $174,500

1.C. Cash collected from customers is:

a. $489,500

b. $450,000

c. $407,600

d, $424,400

1.D. Cash paid for wages is:

a. $135, 000

b. $3,000

c. $133,000

d, $134,000

Answer 1

1.A.($)

Net Income	153,700
Add: Depreciation	59,500
Less: Gains on sales of equipment	(5000)
Cash from Operating activities before working capital adjustment	208,200

Option A is correct.

1.(B)

Cash Flow from operating activities

Before changes to working capital as above	208,200
Changes in current Assets except Cash (59400+60000)-(85000+70000)	-35,600
Changes in current liabilities (24500-22600)	+1900
Cash flow from operating activities	174,500

Hence Option D is correct.

1(C):

Cash collected from Accounts Receivable => Opening Balance + credit sales - Closing Balance

So, 59400+450,000-85000 = $ 424,400.

Hence Option D is correct.

1(D)

Wages paid = Opening + current year expense - closing

Ie, 4000+134000-3000 =$ 135,000

So, Option A is correct