Understanding Financial Accounting 3rd Canadian Edition by Christopher D. Burnley solution manual

Increase in working capital deficiency                 $ (14,698,943)
 
          The working capital deficiency deteriorated from 2020 to 2021, it increased by $14,698,943.  This represents an increase of 100%. 

RI-2 (Continued)
 
c.   All amounts are in Canadian dollars.
     i.      Revenues in 2021: $86,699,345.
     ii.     Cost of sales in 2021: $66,000,997.
   iii.    Gross profit in 2021: $20,698,348 or 23.9%
     iv.    Selling, marketing, and administrative expenses in 2020: $11,842,088.  
     v.     Income tax expense in 2020: $537,779.
     vi.    Net income in 2021: $3,000,013.
     vii.   Intangible assets at the end of 2021: $15,002,826.
     viii. Accounts receivable at the beginning of 2021: $4,976,226.
     ix.    Share capital at the end of 2021: $39,546,216.
     x.     Property, plant, and equipment at the end of 2021: $46,630,107.
     xi.    Cash flows from in operating activities in 2021: $12,877,105.
   xii.   Cash payments to purchase property, plant, and equipment in 2021: ($18,407,338).
     xiii. Cash used for the payment of dividends in 2021: $3,748,831. 
    
d.    In 2021, 70.8% ($81,769,324/$115,463,685) of Waterloo Brewing’s assets were financed with debt, while 29.2% ($33,694,361/$115,463,685) were financed by equity.  
 
e.    The two largest sources of cash were operating activities of $12,877,105 and the issuance of non-revolving demand loans of $14,505,315.  The two largest uses of cash were the purchase of property, plant and equipment ($18,407,338) and dividends paid of ($3,748,831).
 
 f.   The income of $3,000,013 included non-cash depreciation and amortization of $7,810,676. This is the most significant difference between the net income on the statement of income and the cash flows from operations.    
 
LO 5  BT: AN  Difficulty: M Time: 35 min.  AACSB: Analytic CPA: cpa-t001, cpa-t005
 CM: Reporting and Finance
 

RI1-3
 
a. All amounts in thousands of Canadian dollars:
         i.        Total sales in 2021: $240,506.
         ii.              Cost of goods sold in 2021: $100,767.
         iii.         Selling, general and administrative expenses for 2020: $188,308.
         iv.   Interest expense for 2020: $15,567.
         v.              Income tax expense for 2021: $4,885.
         vi.      Net income for 2021: $13,080.
         vii.      Inventories at the end of 2021: $42,401.
         viii.       Accounts payable and accrued liabilities at the beginning of 2021: $20,252.
         ix.      Shareholders’ equity at the end of 2021: $164,180.
         x.              Retained earnings (deficit) at the end of 2021: $(36,608). 
         xi.      Cash provided from operating activities in 2021: $50,922.
         xii.     Cash payments to acquire fixed assets in 2021: $3,423.
         xiii.       Cash used to repay long-term debt in 2021: $14,000.
         xiv.    Cash used to pay dividends in 2021: $nil.
 
b.    At January 30, 2021, Roots’ total assets of $390,323 were financed by liabilities of $226,143 and equity of $164,180.  Approximately 42.1% of Roots’ assets were financed by shareholders, while 57.9% were financed using debt.