Question

IFRS 23-7

Sandhill Corporation has contracted with you to prepare a statement of cash flows. The controller has provided the following information.

December 31

2017

2016

Buildings

$ –0–

$29,250

Equipment

47,500

22,500

Patents

5,200

6,500

Investments

–0–

3,250

Inventory

10,750

8,500

Accounts receivable

12,500

9,500

Cash

33,425

13,500

$ 109,375

$93,000

Share capital—ordinary

$ 43,500

$33,500

Retained earnings

21,000

6,500

Allowance for doubtful accounts

3,250

5,000

Accumulated depreciation on equipment

2,250

5,000

Accumulated depreciation on buildings

–0–

6,500

Accounts payable

5,625

3,250

Dividends payable

–0–

5,250

Long-term notes payable

30,500

23,750

Notes payable, short-term (non-trade)

3,250

4,250

$ 109,375

$93,000

Additional data related to 2017 are as follows.

1. Equipment that had cost $11,500 and was 40% depreciated at time of disposal was sold for $2,750.

2. $10,000 of the long-term notes payable was paid by issuing ordinary shares.

3. Cash dividends paid were $5,250.

4. On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $31,500.

5. Equity investments (non-trading) were sold at $1,950 above their cost.

6. Cash was paid for the acquisition of equipment.

7. A long-term note for $16,750 was issued for the acquisition of equipment.

8. Interest of $2,250 and income taxes of $7,500 were paid in cash.

Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)

SANDHILL CORPORATION

Statement of Cash Flows

$

Adjustments to reconcile net income to

$

$

Supplemental disclosures of cash flow information:

$

$

$

$

Answer 1