Statement of Cash Flows - Indirect Method
Titiki Ltd $\quad$

question 39

Essay

Statement of cash flows - indirect method
Titiki Ltd. had the following comparative statement of financial position:

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Titiki Ltd.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Statement of Financial Position
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ As at December 31

$\begin{array}{c}\begin{array}{lll}\\ \text {Cash}\\ \text {Accounts receivable}\\ \text {Inventories}\\ \text {Prepaid insurance}\\ \text {Equipment}\\ \text {Accumulated depreciation-equipment}\\ \text {Total assets}\\\\ \text {Accounts payable}\\ \text {Wages payable}\\ \text {Interest payable}\\ \text {Income taxes payable}\\ \text {Long-term note payable}\\ \text {Common shares}\\ \text {Retained earnings}\\ \text {Total liabilities and shareholders' equity}\end{array}\begin{array}{r} \underline{2020}\\\$ 20,500 \\34,000 \\20,000 \\2,500 \\102,000 \\\underline{(22,500) }\\\underline{ \$ 156,500} \\\\\$ 23,000 \\4,000 \\2,000 \\4,000 \\30,000 \\65,000 \\\underline{28,500} \\\underline{\$ 156,500} \end{array}\begin{array}{r}\$ \underline{2019} \\\$ 12,500 \\25,500 \\30,000 \\2,000 \\90,000 \\\underline{(12,500)} \\\underline{\$ 147,500} \\\\\$ 20,000 \\2,000 \\3,000 \\5,000 \\34,500 \\65,000 \\\underline{18,000}\\\underline{\$ 147.500 } \end{array}\end{array}$

Additional information:
-Net income for the fiscal year was $13,500.
-Equipment that cost $10,000 and was sold for a gain of $1,000 during 2020. The equipment's accumulated depreciation was $7,000.
Prepare the statement of cash flows using the indirect format.

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Definitions:

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