Indigo House Inc. had the following condensed statement of financial position at December 31, 2019:...
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Accounting
Indigo House Inc. had the following condensed statement of financial position at December 31, 2019:
INDIGO HOUSE INC. Statement of Financial Position December 31, 2019 | |||||||
---|---|---|---|---|---|---|---|
Cash | $10,100 | Current liabilities | $14,550 | ||||
Current assets (non-cash) | 34,800 | Longterm notes payable | 30,100 | ||||
Bond investment at amortized cost | 40,450 | Bonds payable | 32,200 | ||||
Plant assets (net) | 57,550 | Common shares | 80,450 | ||||
Land | 38,700 | Retained earnings | 24,300 | ||||
$181,600 | $181,600 |
Indigo House Inc. follows IFRS and chooses to classify dividends paid as financing activities and interest paid as operating activities on the statement of cash flows. During 2020, the following occurred:
1. | Indigo House Inc. sold part of its investment portfolio in bonds for $16,800, resulting in a gain of $460. | |
2. | Dividends totalling $17,800 were paid to shareholders. Dividends paid are treated as financing activities. | |
3. | A parcel of land, to be used as a parking lot, was purchased for $4,200. | |
4. | Common shares were issued for cash totalling $18,500. | |
5. | Bonds payable of $9,800 were retired at par. | |
6. | Equipment was purchased through the issuance of $24,000 of bonds. | |
7. | Net income for 2020 was $46,000 after allowing for depreciation on Indigo House Inc.s plant assets of $14,050. The amount of interest paid during 2020 was $4,360 and the amount of income taxes paid was $20,300. | |
8. | Both current assets (other than cash) and current liabilities remained at the same amount. |
(a)
Prepare a statement of cash flows for 2020 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
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