The following are the summary account balances from the

statement #930
The following are the summary account balances from the statement of financial position of
Granger Inc. as at October 31, 2014. The accounts are followed by a list of transactions for the
month of November 2014. The following accounts have normal debit or credit balances. The
amounts shown are in millions of dollars:The following transactions occurred in November 2014:
a. Purchased new equipment costing $ 50 by issuing long- term debt. b. Received $ 90 on trade
receivables. c. Received and paid the telephone bills for $ 1. d. Earned $ 100 in sales to
customers on account; the cost of sales was $ 60. e. Paid employees $ 10 for salaries earned in
November. f. Paid half of the income taxes payable. g. Purchased inventory for $ 23 on
account. h. Prepaid rent for December for a warehouse for $ 12. i. Paid $ 10 of long- term
borrowings and $ + in interest on the debt. j. Purchased a patent (an intangible asset) for $ 8
cash.Required:1. Prepare a spreadsheet similar to Exhibit 5.4 . Show the effects of the
November 2014 transactions on the appropriate accounts, and on the three cash flow
categories. 2. Prepare a table similar to Exhibit 5.5 showing both the cash and non- cash
components of revenues and expenses for November 2014. 3. Prepare the operating activities
section of the statement of cash flows for Granger Inc. for November 2014 using the indirect
method. 4. Compute the quality of earnings ratio for November 2014, and explain why it is
different from 1.0.View Solution:
The following are the summary account balances from the statement

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