Reference no: EM133076584
Question - The records of Medical Software Inc. for the company's 2020 fiscal year end show the following financial information. The company has a December 31 year end and has chosen to use ASPE for its financial reporting. All amounts reported are in thousands of dollars.
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Medical Software Inc. Balance sheet As at December 31 ('000s)
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2020
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2019
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Cash
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$2,990
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$1,500
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Accounts receivable, net
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4,000
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3,770
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Inventory
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2,010
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2,060
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Prepaid expenses
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460
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470
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Investments
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750
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200
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Intangible assets
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6,480
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6,000
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Property, plant, and equipment
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6,100
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5,000
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Accumulated depreciation and amortization
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(2,200)
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(2,000)
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$20,590
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$17,000
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Trade and other payables
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$6,790
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$7,000
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Deferred revenue
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2,100
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2,000
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Long-term notes payable
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1,300
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-
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Common shares
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7,000
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4,000
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Retained earnings
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3,400
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4,000
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$20,590
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$17,000
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Medical Software Inc. Income statement For the year ended December 31, 2020 ('000s)
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Sales
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$3,600
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Cost of goods sold
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500
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Gross profit
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3,100
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Depreciation
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700
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Development costs
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600
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Gain on sale of property, plant, and equipment
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(400)
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Other expenses
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500
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Total expenses
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1,400
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Net income
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$1,700
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Additional information -
- Property, plant, and equipment with a cost of $1,000 and an accumulated depreciation balance of $500 was sold on June 30, 2020.
- During the year, the company issued shares with a value of $1,800 in exchange for property, plant, and equipment.
- Included in other expenses is an impairment loss of $300 due to a permanent decline in the fair value of investments held by the company.
- As at December 31, 2020, the company had an allowance for doubtful accounts balance of $400 (December 31, 2019 - $300). Included in other expenses for the year ended December 31, 2020, is $200 for bad debt expense.
Required - Prepare the cash flow statement of Medical Software for the year ended December 31, 2020, using the indirect method.