Oswald Ltd

question 29

Multiple Choice

Oswald Ltd. has recently decided to go public and has hired you as their independent accountant. They wish to adhere to IFRS and know that they must prepare a statement of cash flows. Their financial statements for 2020 and 2019 are provided below: The following additional data were provided for calendar 2020:
1) Dividends declared and paid were $ 24,000.
2) Equipment was sold for $ 30,000. This equipment originally cost $ 44,000, and had a book value of $ 36,000 at the time of sale. The loss on sale was included in "selling and administrative expenses," as was the depreciation expense for the year.
3) Bonds were retired during the year at par.
For a statement of cash flows for calendar 2020, using the indirect method, the cash provided by operating activities is

• A) $ 51,000.
• B) $ 36,000.
• C) $ 30,000.
• D) $ 25,000.

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Definitions:

Prepaid Expense

An expense that has been paid in advance and is recorded as an asset until it is actually incurred.