Cashflow Solutions Q2

Valli Ltd.
Comparative Balance Sheet

As at December 31, 2021 and 2022
2022 2021
Cash 69,000 21,000
Investments - held for trading 25,000 22,000
Investments - available for sale 30,000 25,000
Accounts receivable 53,000 39,000
Inventory 50,000 60,000
Prepaid expenses 6,000 9,000
Plant assets 540,000 380,000
Accumulated depreciation (140,000) (125,000)
Goodwill 51,000 58,000
684,000 489,000
Accounts payable 41,000 46,000
Accrued liabilities 33,000 24,000
Cash dividends payable 8,000 6,000
Bonds payable 50,000 47,000
Mortgage payable - 136,000
Deferred income tax liability 5,000 8,000
Preferred shares 201,000 -
Ordinary shares 320,000 200,000
Retained earnings 21,000 22,000
Reserves 5,000 -
684,000 489,000
Valli Ltd.
Statement of Comprehensive Income
As at December 31, 2022
Sales 660,000
Cost of sales (359,000)
Gross profit 301,000
Interest expense, long term (6,000)
Depreciation expense (25,000)
Operating expenses (160,000)
Other gains and losses (4,000)
Income before income tax 106,000
Income tax expense (39,000)
Net income 67,000
Other comprehensive income: Holding gain on available-for-sale securities 5,000
Comprehensive income 72,000
Valli Ltd
Statement of Cash Flows
for the year ended December 31, 2022
Cash flow from operating activities

Net income 67,000
Adjustments for:
+ Depreciation 25,000
+ Goodwill impairment 7,000
- Gain on FVPL securities (3,000)
+ Interest expense 6,000
- Interest paid (3,000)
+ Income tax expense 39,000
- Income tax paid (42,000)
-∆ Increase in accounts receivable (14,000)
-∆ Decrease in inventory 10,000
-∆ Decrease in prepaid expenses 3,000
+∆ Decrease in accounts payable (5,000)
+∆ Increase in accrued liabilities 9,000
Net cash from operating activities 99,000
Cash flow from investing activities

Sale of plant assets 30,000
Purchase of plant assets (100,000)
Net cash from investing activities (70,000)
Cash flow from financing activities
Retirement of mortgage debt (136,000)
Issuance of preferred shares 201,000
Payment of dividends (46,000)
Net cash from financing activities 19,000
Net increase in cash 48,000

Cash, Jan 1 2022 21,000
Cash, Dec 31, 2022 69,000
Notes:
During the year, Valli exchanged 5,000 ordinary shares for plant assets
having fair
During the value of $100,000.
year, Valli declared and issued a stock dividend of 1,000 ordinary
shares. The transaction was valued at $20,000.
Dr Interest expense 6,000
Cr Cash 3,000
Cr Bonds payable 3,000
CIT expense 42,000

DIT expense (3,000)
Income tax expense 39,000
Dr CIT expense 42,000

Cr IT payable 42,000
Dr DIT liability 3,000
Cr DIT expense/recovery 3,000
Dr IT payable 42,000
Cr Cash 42,000
Dr Plant assets 100,000

Cr Common shares 100,000
Dr Retained earnings 20,000

Cr Common shares 20,000
Plant Assets Accumulated depreciation

380,000 125,000
40,000 25,000
common shares 100,000 10,000
cash paid 100,000
540,000 140,000
Retained earnings Dividends payable

22,000 6,000
67,000 48,000
stock div 20,000
cash div declared 48,000 div paid 46,000
21,000 8,000
NBV of plant assets sold = 40,000 - 10,000 = 30,000
Gain on sale of plant assets = 30,000 - 30,000 = 0
Valli Ltd
Statement of Cash Flows
for the year ended December 31, 2022
Cash flow from operating activities

Cash received from customers 646,000 660,000 - 14,000
Cash paid to suppliers (354,000) 359,000 + (10,000) - (5,000)
Interest paid (3,000) 6,000 - 3,000
Other operating expenses (148,000)
Income taxes paid (42,000)
Net cash from operating activities 99,000
Cash flow from investing activities

Sale of plant assets 30,000
Purchase of plant assets (100,000)
(70,000)
Cash flow from financing activities
Retirement of mortgage debt (136,000)
Issuance of preferred shares 201,000
Payment of dividends (46,000)
19,000
Net increase in cash 48,000

Cash, Jan 1 2022 21,000
Cash, Dec 31, 2022 69,000
Notes:
During the year, Valli exchanged 5,000 ordinary shares for plant assets having
fair value of $100,000.
During the year, Valli declared and issued a stock dividend of 1,000 ordinary
shares. The transaction was valued at $20,000.
(10,000) - (5,000)

Cashflow Solutions Q2

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Valli Ltd.

Comparative Balance Sheet

Cash flow from operating activities

Cash flow from investing activities

Net increase in cash 48,000

CIT expense 42,000

Dr CIT expense 42,000

Dr Plant assets 100,000

Dr Retained earnings 20,000

Plant Assets Accumulated depreciation

Retained earnings Dividends payable

Cash flow from operating activities

Cash flow from investing activities

Net increase in cash 48,000

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