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

 
c.     In 2021, Roots had a net cash outflow of $31,515 from financing activities (the company repaid debt and paid principal on lease liabilities) and a net cash outflow of $3,964 for investing activities (the company purchased fixed assets).
 
d.      A classified statement of financial position presents information in order of liquidity.  This is how Roots structures its consolidated statement of financial position, by separating current from non-current assets and liabilities.  Current assets are reported according to liquidity, with least liquid last and most liquid first. 
 
 
LO 5  BT: AN  Difficulty: M Time: 35 min.  AACSB: Analytic CPA: cpa-t001, cpa-t005
 CM: Reporting and Finance
 

RI-4
a.     All amounts are in thousands of U.S. dollars
         i.    Net sales in 2020 - $1,981,276
         ii     Gross profit in 2020 - $249,059
         iii.   Total selling, general, and administrative expenses in 2019 –
               $340,487
         iv.  Net earnings (loss) in 2020 - $(225,282)
         v.   Inventories in the beginning of 2020 - $1,052,052
         vi.  Trade accounts receivable at the end of 2020 - $196,480
         vii.  Retained earnings at the end of 2020 - $1,359,061
         viii. Long-term debt at the end of 2019 - $845,000
        ix.  Cash flows from operating activities in 2020 - $415,030
         x.  Cash payments to acquire property, plant, and equipment in 2020 -  
     $50,670
         xi.  Dividends paid in 2020 - $30,553
         xii. Cash used for investing activities in 2019 - $135,751
    
b.    At January 3, 2021, Gildan’s total assets of $3,020,948 were financed by liabilities of $1,462,051 and equity of $1,558,897.  Approximately 51.6% of Gildan’s assets were financed by shareholders, while only 48.4% were financed using debt. 
 
c.     The two largest sources of cash in 2020 were cash flows from operating activities of $415,030 and proceeds from issuance of a term loan for $400,000. The two largest uses of cash in 2020 were the purchase of property, plant and equipment of $50,670 and decrease (repayment) in amounts drawn under a revolving long-term bank credit facility, of $245,000.
 
d.      Gildan Activewear prepared a classified statement of financial position that presents information in order of liquidity. The presence of sub-totals for current assets and current liabilities shows that the statement is a classified statement of financial position. Gildan separates current from non-current assets and liabilities.  Current assets are reported according to liquidity, with most liquid first and least liquid last.

RI-4 (Continued)
 
e. Year         Current assets Current liabilities          Working capital
Jan. 3, 2021              $1,544,473                       $359,606              $ 1,184,867
Dec. 29, 2019             1,514,173                          422,404              1,091,769
Increase in working capital                   $ 93,098
 
Gildan’s working capital increased by $93,098,000 in fiscal year 2020.  This is 8.5% higher than working capital in fiscal year 2019.
 
LO 5  BT: AN  Difficulty: M Time: 35 min.  AACSB: Analytic CPA: cpa-t001, cpa-t005
 CM: Reporting and Finance
 
RI1-5 Answers to this question will depend on the company selected.