Valli Ltd.’s financial statements as at December 31, 2021, appear below:

Supplemental information: 

■ During the year, Valli exchanged 5,000 ordinary shares for plant assets having a fair value of $100,000. 

■ During the year, Valli declared and issued a stock dividend of 1,000 ordinary shares. The transaction was valued at $20,000. 

■ During the year, goodwill was written down $7,000 to reflect a permanent impairment of the asset. 

■ The deferred income tax liability represents temporary differences relating to the use of capital cost allowance for income tax reporting and straight-line depreciation for financial statement reporting. 

■ Valli did not buy or sell any at fair value through profit or loss or at fair value through other comprehensive income securities during the year. 

■ The recorded increase in the bonds payable account was due to the amortization of the discount. 

■ Valli elects to record interest paid as an operating activity and dividends paid as a financing activity. 

■ During the year, Valli sold equipment (plant assets) that originally cost $40,000 for $30,000 cash. 

Required: 

a. From the information above, prepare Valli’s statement of cash flows for the year ended December 31, 2021, using the indirect method. 

b. Prepare Valli’s cash flows from operating activities for the year ended December 31, 2021, using the direct method. 

c. Prepare note disclosure(s) for non-cash transactions.

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Cash Investments purposes at fair value through profit or loss held for trading Investments at fair value through other comprehensive income Accounts receivable Inventory Prepaid expenses Plant assets Accumulated depreciation Goodwill Valli Ltd. Comparative Balance Sheet As at December 31 Accounts payable Accrued liabilities Cash dividends payable Bonds payable Mortgage payable Deferred income tax liability Preferred shares Ordinary shares Retained earnings Reserves 2021 $ 69,000 25,000 30,000 $3,000 50,000 6,000 540,000 (140,000) $1,000 $684,000 $ 41,000 33,000 8,000 50,000 5,000 201,000 320,000 21,000 5,000 $684,000 2020 $ 21,000 22,000 75,000 39,000 60,000 9,000 380,000 (125,000) 58,000 $489,000 $ 46,000 24,000 6,000 47,000 136,000 8,000 200,000 22,000 $489,000