Jamie Bleay Law Ltd

question 73

Essay

Jamie Bleay Law Ltd.'s policy is to report all cash inflows from interest and dividends in the investing section and cash outflows arising from interest and dividends in the financing section. Jamie Bleay Law's activities for the year ended December 31, 2019 included the following:
• Sold a investment at FVPL for $11,000. The book value of this investment, which was held to meet short-term cash commitments, was $11,000.
• Sold an investment at FVOCI for $14,000. The book value and original cost of the investment was $14,000.
• Borrowed $120,000 from the bank for investment purposes.
• Sold equipment for $26,000 that originally cost $20,000. The net book value of this item at time of sale was $14,000.
• Received $9,000 in interest and $7,000 in dividends on sundry investments.
• Paid $4,000 interest on the investment loan.
• Acquired land and buildings valued at $700,000 by paying $200,000 cash and issuing ordinary shares for the balance.
• Bought $550,000 in bonds at a premium, paying $560,000 cash. The investment was classified at amortized cost.
Required:
a. Prepare the cash flows from investing activities section of the statement of cash flows.
b. Identify how the activities listed above that are not investing activities would be reported in the statement of cash flows assuming that the statement is prepared using the indirect method.

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Definitions:

Maslow's Hierarchy

A theory in psychology proposing that people are motivated by five basic categories of needs: physiological, safety, love/belonging, esteem, and self-actualization, prioritized hierarchically.

Clothing

Items worn on the body to protect, cover, or adorn, often reflecting personal style or cultural practices.

Deficiency Needs

pertain to basic requirements for physical and psychological well-being, as identified in Maslow's hierarchy of needs, including safety, love, and self-esteem.

Growth Needs

Psychological desires that drive individuals to achieve personal expansion and progress.