Question

Awesome Inc. Statement of financial position As at December 31 20X8 20X7 Accounts receivable $ 160,000 $ 110,000 Inventory 62,000 50,000 Prepaid expenses 3,000 4,000 Investments at FVPL 18,000 40,000 Investments at FVOCI 18,000 13,000 Property, plant and equipment (net) 80,000 100,000 Land 180,000 94,000 $ 521,000 $ 411,000 Bank overdraft $ 9,000 $ 32,000 Accounts payable 30,000 20,000 Other current liabilities 45,000 60,000 Bank loans 37,000 50,000 Bonds payable 200,000 100,000 Share capital 30,000 10,000 Retained earnings 159,000 133,000 Reserves (AOCI) 11,000 6,000 $ 521,000 $ 411,000 Awesome Inc. Statement of comprehensive income Year ended December 31 20X8 Sales $ 555,000 Depreciation expense 20,000 Interest expense 4,000 Other expenses 380,000 Operating income $ 151,000 Gain on sale of land 5,000 Loss on disposition of investment at FVPL (2,000) Net income before income tax expense $ 154,000 Income tax expense 24,000 Net income $ 130,000 Other comprehensive income 5,000 Comprehensive income $ 135,000 Additional information: ? In 20X8, Awesome Inc. issued $100,000 in bonds to acquire land having a fair value of $100,000. 1. What is the amount that Awesome Inc. will report as cash from financing activities on its statement of cash flows for its year ended December 31, 20X8? a) $3,000 cash inflow b) $7,000 cash inflow c) $97,000 cash outflow d) $117,000 cash outflow

Answer 1

The answer is Option B : 7000 cash inflow.

Statement of Cash flow from Financing Activities
Repayment of Loan	(13,000.00)
Issue of Share Capital	20,000.00
Cash Inflow from Financing Activities	7,000.00

	2018	2017	Change
Loan	37,000.00	50,000.00	(13,000.00)
Share Capital	30,000.00	10,000.00	20,000.00

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