Question

Pina Corporation had the following activities in 2020.

1.		Sold land for $201,000.
2.		Purchased an FV-NI investment in common shares for $14,400.
3.		Purchased inventory for $852,000 with cash.
4.		Received $72,300 cash from bank borrowings.
5.		Received interest for $12,900.
6.		Purchased equipment for $489,000 in exchange for common shares.
7.		Issued common shares for $357,000 cash.
8.		Recorded an unrealized gain of $3,250 on investments accounted for using the fair value through net income (FV-NI) model.
9.		Purchased investments in bonds, reported at amortized cost for $60,200.
10.		Declared and paid a dividend of $17,400 (charged to retained earnings).
11.		Investments in bonds reported at amortized cost, with a carrying amount of $409,200, were sold for $418,200.
12.		Dividends of $4,800 were received on FV-NI investments

1. Calculate the amount that Pina should report as net cash provided (used) by investing activities on its statement of cash flows under IFRS. Under IFRS, Pina would adopt the policy of classifying interest and dividends paid as financing activities, and interest and dividends received as investing activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Net cash ________ ( select USED BY or PROVIDED BY) investing activities $________ (enter dollar amount)

2. Calculate the amount that Pina should report as net cash provided (used) by investing activities on its statement of cash flows under ASPE. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Net cash ________ ( select USED BY or PROVIDED BY) investing activities $________ (enter dollar amount)

Answer 1

Part 1

Purchased inventory for $852,000 with cash = operating activity.

Received $72,300 cash from bank borrowings = Financing activity.

Purchased equipment for $489,000 in exchange for common shares = Non cash transactions

Issued common shares for $357,000 cash = Financing activity.

Unrealized gain of $3,250 is not cash inflows.

Declared and paid a dividend of $17,400 = operating activity

Purchase and sell of FV-NI investment = Operating activity

Investing activities on its statement of cash flows under IFRS	IFRS
Cash proceeds from sale of land	$        201,000
Received interest	$          12,900
Purchased investments in bonds	$        (60,200)
Sale of bonds Investments	$        418,200
Dividends received on FV-NI investments	$            4,800
Net cash PROVIDED BY investing activities	$        576,700

Part 2

Investing activities on its statement of cash flows under ASPE	ASPE
Cash proceeds from sale of land	$        201,000
Received interest (under ASPE, it is classified as operating activity)
Purchased investments in bonds	$        (60,200)
Sale of bonds Investments	$        418,200
Dividends received on FV-NI investments (under ASPE, it is classified as operating activity)
Net cash PROVIDED BY investing activities	$        559,000