Problem 22-3 (Part Level Submission) Tamarisk Inc. follows IFRS and has adopted the policy of classifying Interest paid as operating activities and dividends paid as financing activities. Comparative SFP accounts of Tamarisk Inc., and its statement of income for the year ending December 31, 2020, follow: Cash Cash equivalents (Note 1) Accounts receivable Prepaid Insurance Inventory Supplies Long-term Investment, at equity (Note 7) Land (Note 6) Buildings (Note 3) Accumulated depreciation-buildings Equipment (Note 4) Accumulated depreciation equipment Patent Accumulated amortization Change $(5,000) (10,000) 61,000 (19,900) 39,400 (4,000) 10,800 122,000 30,000 (40,000) (7,300) (25,000) December 31 2020 2019 $48,000 $53,000 38,000 48,000 351,000 290,000 14,000 33,900 408,000 368,600 13,000 17,000 419,000 408,200 638,000 516,000 1,310,000 1,280,000 (400,000) (360,000) 634,000 641,300 (160,000) (135,000) 100,000 100,000 (40,000) (35,000 $3,373,000 $3,226,000 $0 $91,000 167,000 158,000 26,000 35,000 55,000 46,000 22,000 53,000 420,000 460,000 999,000 995,000 486,000 380,000 744,000 669,000 454,000 339,000 $3,373,000 $3,226,000 Bank overdrafts (temporary) Accounts payable Income tax payable Accrued liabilities Dividends payable Long-term notes payable Bonds payable Preferred shares (Note 2) Common shares Retained earnings (5,000) $147,000 $(91,000) 9,000 (9,000) 9,000 (31,000) (40,000) 4,000 106,000 75,000 115,000 $147,000 Income Statement $997,000 90,000 $1,087,000 Revenues Sales revenue Investment income Expenses and Losses Cost of goods sold Sales commissions expense Operating expenses (Note 5) Salaries and wages expense Interest expense Loss on disposal of equipment (Note 4) Income tax expense Net Income 313,000 112,000 166,000 101,000 97,000 11,000 96,000 896,000 $191,000 The following is additional information about Tamarisk's transactions during the year ended December 31, 2020. 1. The cash equivalents are typically term deposits that are very liquid and mature on average in 60 days. The bank overdrafts are temporary and reverse within a few days. Tamarisk has opted to show these as cash and cash equivalents on its statement of cash flows. 2. During the year, preferred shares with a carrying amount of $18,000 were converted to common shares. 3. There were no disposals of buildings during the year 2020. 4. Equipment with an original cost of $46,000 and carrying amount of $14,000 was sold at a loss during the year. 5. All depreciation and amortization expense is included in operating expenses. 6. During the year, Tamarisk obtained land with a fair value of $100,000 in exchange for its preferred shares. 7. Investment income includes the equity earnings of $62,000 from a long-term Investment accounted for using the equity method and from interest revenue on the short-term investments referred to in note 1 above. Prepare the statement of cash flows for the year ended December 31, 2020, for Tamarisk Inc. using the indirect method. Prepare any additional discoure notes that are required, including a table that shows the details of the cash and cash equivalents accounts at the end of each period.( amounts.) Tamarisk Inc. Statement of Cash Flows (Indirect Method) Adjustments to reconcile net income to nei cash provided by operating activities:
