Selected accounts from the SFP of Passen Ltd. at 31 December 20X8 and 20X7 are presented below. Passen reported earnings of $100,000 in 20X8. There was a stock dividend recorded, valued at $50,000 that reduced retained earnings and increased common shares.
There was also a cash dividend declared and common shares issued for cash.

Required:

List the items that would be included in the SCF from these accounts for 20X8. Include the appropriate section (operating, investing, or financing). Use the indirect method of presentation in the operating activities section. List the non-cash item disclosure. Make logical assumptions about unexplained changes in accounts.

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As at 31 December 20X8 20X7 Cash dividends payable $ 20,000 $ 12,000 Bonds payable 900,000 500,000 Common shares 400,000 100,000 Retained earnings 225,000 250,000