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Note: Answer the following questions: Question No: 1 A comparative balance sheet for Muscat Company is presented below (Under International Accounting Standards (IAS 17) and

Note: Answer the following questions:

Question No: 1

A comparative balance sheet for Muscat Company is presented below

(Under International Accounting Standards (IAS 17) and International Financial Reporting Standards (IFRS US GAAP)

Muscat Company

Comparative Balance Sheet

2019 2018

Assets

Cash $ 36,000 $ 31,000

Accounts receivable (net) 70,000 60,000

Prepaid insurance 25,000 17,000

Land 18,000 40,000

Equipment 70,000 60,000

Accumulated depreciation (20,000) (13,000)

Total Assets $199,000 $195,000

Liabilities and Stockholders' Equity

Accounts payable $ 11,000 $ 6,000

Bonds payable 27,000 19,000

Common stock 140,000 115,000

Retained earnings 21,000 55,000

Total liabilities and stockholders' equity $199,000 $195,000

Additional information:

1. Net loss for 2019 is $20,000.

2. Cash dividends of $14,000 were declared and paid in 2019.

3. Land was sold for cash at a loss of $4,000. This was the only land transaction during the year.

4. Equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash.

5. $22,000 of bonds were retired during the year at carrying (book) value.

6. Equipment was acquired for common stock. The fair value of the stock at the time of the exchange was $25,000.

Instructions: Prepare a statement of cash flows for the year ended 2019, using the indirect method.

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