The following accounts appear in the ledger of Tanaka Limited, which uses IFRS, and has adopted the policy of classifying dividends paid as operating activities: 

Instructions 

Show how the information posted in the accounts is reported on a statement of cash flows by preparing a partial statement of cash flows using the indirect method. The loss on disposal of equipment (November 15) was $5,800.

Transcribed Image Text:

Retained Earnings Dr. Cr. Bal. Jan. 1, 202o Credit balance $ 42,000 Aug. 15 Dividends (cash) $15,000 27,000 Dec. 31 Net income for 2020 $40,000 67,000 Equipment Dr. Cr. Bal. Jan. 1, 2020 Debit balance $140,000 Aug. 3 Purchase of equipment $62,000 202,000 Sept. 10 Purchase of equipment 48,000 250,000 Nov. 15 Equipment sold $56,000 194,000 Accumulated Depreciation-Equipment Dr. Cr. Bal. Jan. 1, 2020 Credit balance $ 84,000 Nov. 15 Accumulated depreciation on equipment sold $25,200 58,800 Dec. 31 Depreciation for 2020 $16,800 75,600