60.1K

Verified Solution

Link Copied!

AP$5-11$A $($Preparation of statement of cash flows$)$ Digiread Technologies Ltd$.($DTL$)$ is a privately held distributor of e$-$readers and tablets. The Calgary$-$based company is well established and is currently managed by its founder, Erin Jacobs. The company's financial statements are presented below, together with some additional information.DIGIREAD TECHNOLOGIES LTD$.$Statement of IncomeFor the year ended December $31,2024$Sales revenue$$50,500,000$Cost of goods sold$34,400,000$Gross profit$16,100,000$Wages expense $4,000,000$Depreciation expense$1,200,000$Interest expense$1,900,000$Income tax expense$1,600,000$Gain on sale of equipment$(600,000)$Net income $$8,000,00020242023$AssetsCurrent assets:Cash$$15,500,000$$$8,500,000$Accounts receivable net$)11,500,00015,500,000$Inventory$16,900,00019,000,000$Total current assets$43,900,00043,000,000$Equipment$39,400,00030,000,000$Accumulated depreciation, equipment$(6,600,000)(6,400,000)$Total assets$$76,700,000$$$66,600,000$Liabilities and sharcholders' equityCurrent liabilities:Accounts payable$$11,900,000$$ $7,000,000$Wages payable$1,200,0001,000,000$Total current liabilities$13,100,0008,000,000$Bonds payable$21,000,00026,000,000$Common shares$14,000,0009,000,000$retained earnings $28,600,00023,600,000$total liabilities and shareholders equity$$76,700,000$$$66,600,000$DIGIREAD TECHNOLOGIES LTD$.$Other Selected Financial Information for the Year Ended December $31,20241.$ Total sales in $2024$ were consistent with the prior year's, and the company's dividend policy has remained consistent for the past five years$\mathrm{.}2.$ During $2024,$ DTL sold a piece of equipment for $$2\mathrm{.}1$ million. The equipment had originally cost $$2\mathrm{.}5$ million and had a net carrying amount of $$1\mathrm{.}5$ million at the time of sale$\mathrm{.}3.$ On August $1,2024,$ DTL$\text{'}$s board of directors approved the retirement of bonds with a carrying amount of $$5$ million through the issuance of common shares.

Answer & Explanation Solved by verified expert

See Answer