6 Cash Flow Statement (Total 20 marks) The following information is available for Praline Ltd. for the year ended 31 December 2021: Collection of principal on long-term loan to a supplier $35,000 Acquisition of equipment for cash 10,000 Proceeds from the sale of long-term investment at book value 27,000 Issuance of common stock for cash 20,000 Depreciation expense 25,000 Tax expense 7,000 Redemption of bonds payable at carrying (book) value 24,000 Payment of cash dividends 9,000 Net income 30,000 40,000 Purchase of land by issuing bonds payable In addition, the following information is available from the comparative balance sheets of the company: Cash Accounts receivable (net) Prepaid insurance Total current assets Accounts payable Tax payable Salaries payable Total current liabilities Required: 2021 2020 $102,000 $14,000 20,000 15,000 17,000 13,000 $139,000 $42,000 $ 20,000 $15,000 5,000 4,000 4,000 7,000 $ 29,000 $26,000 1. Prepare Praline Ltd's statement of cash flows for the year ended 31 December 2021 using the indirect method. Management wish dividends paid to be presented as financing activity. (18 marks) 2. Why is it important to disclose material non-cash transactions in the cash flow statement? Which accounting principle is relevant here? (2 marks)