Tub Time Corp

question 56

Essay

Tub Time Corp.'s policy is to report all cash flows arising from interest and dividends in the operating activities section. Tub Time's activities for the year ended December 31, 2021 included the following:
• 2021's net income after taxes totaled $220,000.
• Declared and issued a stock dividend valued at $40,000.
• Accounts receivable decreased $44,000 in 2021.
• Sold a investment at FVPL for $13,000. The book value was $11,000. (Assume this investment at FVPL was held for trading purposes.)
• Interest revenue for the period was $6,000. The interest receivable account decreased $4,000.
• Declared a $10,000 dividend payable. The dividends payable account decreased $19,000 in 2021.
• Sold an investment at FVOCI for $9,000. The original cost of the investment was $14,000.
• Tub Time recorded a $15,000 goodwill impairment loss during the year.
• Depreciation expense for the year was $14,000.
Required:
a. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.
b. Identify how the activities listed above that are not operating activities would be required in the statement of cash flows.

---

Definitions:

Earth-Sustaining Economy

An economic system aimed at balancing human needs with the protection of the natural world, ensuring the planet's health and resources for future generations.

Sustainable Use

Utilization of natural resources in a way that maintains their viability and preserves their ecological balance for future generations.

Nonrenewable Materials

Materials or resources that cannot be replaced once consumed, such as fossil fuels, minerals, and metals, often leading to concerns over their depletion and environmental impact.

Internalize External Costs

The process of accounting for the environmental and societal costs of economic activities in the price of goods and services.