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Problem 13-2A a The income statement for Ivanhoe Ltd., a private company following ASPE, is presented here: IVANHOE LTD. Income Statement Year Ended November 30,

Problem 13-2A a

The income statement for Ivanhoe Ltd., a private company following ASPE, is presented here:

IVANHOE LTD. Income Statement Year Ended November 30, 2018
Sales $8,100,000
Cost of goods sold 4,300,000
Gross profit 3,800,000
Operating expenses 2,040,000
Income from operations 1,760,000
Interest expense 150,000
Income before income tax 1,610,000
Income tax expense 400,000
Net income $1,210,000

Additional information:

1. Operating expenses include $79,000 of depreciation expense and a $103,000 impairment loss on property, plant, and equipment.
2. Accounts receivable increased by $187,000.
3. Inventory decreased by $55,000.
4. Prepaid expenses related to operating expenses increased by $42,000.
5. Accounts payable to suppliers of merchandise decreased by $189,000.
6. Accrued liabilities related to operating expenses decreased by $90,000.
7. Interest payable decreased by $10,000.
8. Unearned revenue that was received from customers decreased by $21,000.
9. Income tax payable increased by $28,000.

(a) (a) Prepare the operating activities section of the statement of cash flows, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

IVANHOE LTD. Statement of Cash Flows (Partial)-Indirect Method Year Ended November 30, 2018

Operating activities

Adjustments to reconcile net income to

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