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Kingbird 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 Kingbird 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 December 31 2020 2019 $43,000 $53,000 40,000 47,400 350,000 282,000 17,200 33,100 416,000 374,700 13,000 17,000 415,000 402,200 633,000 510,000 1,310,000 1,280,000 (400,000) (360,000) 636,000 643,700 (160,000) (135,000) 100,000 100,000 (40,000) (35,000) $3,373,200 $3,213,100 $0 $89,400 165,000 156,000 26,000 35,000 58,000 44,000 18,000 49,000 420,000 460,000 999,000 995,000 486,000 380,000 746,000 671,000 455,200 333,700 $3,373,200 $3,213,100 Change $(10,000) (7,400) 68,000 (15,900) 41,300 (4,000) 12,800 123,000 30,000 (40,000) (7,700) (25,000) -0- (5,000) $160,100 $(89,400) 9,000 (9,000) 14,000 (31,000) (40,000) 4,000 106,000 75,000 121,500 $160,100 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 Income Statement $988,000 90,000 $1,078,000 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 311,000 107,000 166,000 104,000 93,000 11,000 96,000 888,000 $190,000 The following is additional information about Kingbird'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. Kingbird 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, Kingbird 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. (d) Prepare the statement of cash flows for the year ended December 31, 2020, for Kingbird Inc. using the indirect method. Prepare any additional disclosure notes that are required, including a table that shows the details of the cash and cash equivalents accounts at the end of each period. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000). Do not leave any answer field blank. Enter o for amounts.) Kingbird Inc. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to net cash provided by operating activities: Activate Windows A A Non-cash investing and financing activities Additional disclosures: $ > $ Cash and Cash Equivalents: 2020 2019