Preparation of Statement of Cash Flows (Direct Method)

question 11

Essay

Preparation of statement of cash flows (direct method)
White Horse Ltd. has prepared the following comparative statements of financial position at December 31, 2019 and 2020: White Horse adheres to ASPE.
1. The Accumulated Depreciation account has been credited only for the depreciation expense for the year. There were no disposals of property, plant and equipment, but new equipment was purchased during 2020.
2. Depreciation expense and a charge for impairment of goodwill have both been included in operating expenses.
3. The Retained Earnings account was debited for cash dividends declared and paid of $ 46,000, and credited for the net income for the year.
The condensed income statement for 2020 is as follows: Instructions
From the information above, prepare a statement of cash flows (direct method) for calendar 2020.

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Definitions:

Coccidioides Immitis

A fungus that can cause coccidioidomycosis, also known as Valley fever, which is a disease that affects the lungs and can spread to other parts of the body.

Protist

A diverse group of eukaryotic microorganisms, which are neither plants, animals, nor fungi, and share some characteristics with those groups.

Eukaryotic

Referring to cells that contain a nucleus and other organelles enclosed within membranes, characteristic of all life forms except bacteria and archaea.

Single Cell

Pertaining to an organism or entity that consists of only one cell, often referring to unicellular organisms.