e5.16

Ixchange of furniture for equipment Los on disposal of equipment m. Payment . Increase in scents receivable during year n. Receipt of divided 15.16 LO 8,91 Preparation of Partial Statement of Cash Flows-Operating Act the Matement of income of Kale Transport Inc. for the year December 31, 2000, pot ing condensed information Kneale Transport Ine Year Ended December 31, 202 Statement of Income Service reverve Operating expenses Income from operations 175.000 Other revenues and expenses Gain on disposal of equipment Interest expense Income before income tax Income tax Net income $25.000 190.000 42.000 Kneale's statement of financial position included the following comparative data at December 5148 000 Accounts receivable 2019 550.000 Prepaid insurance 560,000 8.000 5.000 Accounts payable 30,000 41.000 Interest payable 2.000 750 Income tax payable 8,000 4,500 Unearned revenue 10.000 14.000 Additional information: Operating expenses include $70,000 in depreciation expense. The company follows IFRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows. Instructions a. Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, using the 1. indirect method and 2. direct method b. Digging Deeper From the perspective of an external user of Kneale Transport's financial state ments, discuss the usefulness of the statement of cash flow prepared using either the indirect or the direct method. E5.17 (LO 8, 9) (Preparation of Statement of Cash Flows) The comparative statement of finan cial position of Dropafix Inc. as at June 30, 2020, and a statement of comprehensive income for the 2000 fiscal year follow: Dropafix Inc. Statement of Financial Position