21 Use the information below to prepare a statement of cash flow using the indirect method. 1) Dragon Ltd. Comparative Statements of financial position as at December 31st 2020 (all amounts in thousands of pounds, ,000) ASSETS Land 2020 2019 ,000 ,000 150,000 140,000 Buildings 400,000 400,000 Accumulated depreciation-buildings (42,000) (22,000) Equipment 386,000 136,000 Accumulated depreciation-equipment (56,000) (20,000) Prepaid expenses 8,000 12,000 Inventory 108,000 Accounts receivable 136,000 52,000 Cash 108,000 74,000 20 pts Cash 108.000 74.000 1.198,000 772.000 EQUITY AND LIABILITIES Share capital-ordinary (1 par value) 440,000 120,000 Retained earnings Bonds payable 412,000 272,000 280,000 300,000 Accounts payable 46,000 80,000 Accrued expenses payable 20,000 Q 1.198.000 772.000 2) Dragon Ltd. Income Statement for the year ended at December 31st 2020 (all amounts in thousands of pounds, ,000) Sales revenue Cork of moods.cold 2020 ,000 1,780,000 1000.000 Sales revenue Cost of goods sold Operating expenses Interest expense Loss on disposal of plant assets Income before income taxes Income tax expense Net income 1,780,000 930,000 442,000 24,000 4.000 380,000 130,000 250,000 3) Additional informaiton (all amounts in thousands of pounds, ,000): 1. Operating expenses include depreciation expense of 66,000. 2. Equipment with a cost of 82,000 and a book value of 72,000 was sold for 68,000 cash. 3. Land was sold at its book value for cash. 4. Interest expense of 24,000 was paid in cash. 5. Equipment with a cost of 332,000 was purchased for cash. 6. Bonds of 20,000 were redeemed at their face value for cash. 7. Ordinary shares (1 par value) of 260,000 were issued for cash. 8. Cash dividends of 110,000 were declared and paid in 2020. 9. Ordinary shares of 60,000 were issued in exchange for land. Required: 1. Operating expenses include depreciation expense of 66,000. 2. Equipment with a cost of 82,000 and a book value of 72,000 was sold for 68,000 cash. 3. Land was sold at its book value for cash. 4. Interest expense of 24,000 was paid in cash. 5. Equipment with a cost of 332,000 was purchased for cash. 6. Bonds of 20,000 were redeemed at their face value for cash. 7. Ordinary shares (1 par value) of 260,000 were issued for cash. 8. Cash dividends of 110,000 were declared and paid in 2020. 9. Ordinary shares of 60,000 were issued in exchange for land. Required: (a) Prepare the Dragon Ltd. Statement of Cash Flows - Indirect Method for the year ended at December 31st 2020 (all amounts in thousands of pounds, ,000) (18 marks) (b) Show your workings briefly on the sales of land in the cash flows from investing activities. (2 marks) (Total 20 marks) Edit View Insert Format Tools Table 12ptv Paragraph BI UA D