Haliburton Paddle Works Ltd. reports net income of 72,000 for year 2. Cash was 28,000 at the start of the year and $41,000 at the end. Complete the figures that frame the question the cash flow statement answers.

Answer

Net income for year 2 → 72000 · Increase in cash during year 2 → 13000 · Net income minus the increase in cash → 59000

Cells - Net income for year 2 · ±0 - Increase in cash during year 2 · ±0 - Net income minus the increase in cash · ±0 Net income **72,000** from the income statement; increase in cash 41,000 − 28,000 = **13,000**; the gap 72,000 − 13,000 = **59,000** is what the cash flow statement explains — the equipment bought, the loan repaid, the dividends paid, and the working-capital that absorbed cash.

Hermanson Vol 1 ch 16 (purpose and classification); Dauderis & Annand §11.1; Lyryx Intermediate FA Vol 1 §4.3; ASPE s.1540 (concept map N1–N3)