Skysong 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 Skysong Inc., and its statement of income for the year ending December 31, 2020, follow:

		December 31
		2020				2019				Change
Cash		$42,000				$48,000				$(6,000	)
Cash equivalents (Note 1)		38,000				48,500				(10,500	)
Accounts receivable		356,000				299,000				57,000
Prepaid insurance		17,700				34,600				(16,900	)
Inventory		411,000				367,100				43,900
Supplies		13,000				17,000				(4,000	)
Long-term investment, at equity (Note 7)		421,000				412,000				9,000
Land (Note 6)		632,000				516,000				116,000
Buildings (Note 3)		1,310,000				1,280,000				30,000
Accumulated depreciationbuildings		(400,000	)			(360,000	)			(40,000	)
Equipment (Note 4)		629,000				637,400				(8,400	)
Accumulated depreciationequipment		(160,000	)			(135,000	)			(25,000	)
Patent		100,000				100,000				0
Accumulated amortization		(40,000	)			(35,000	)			(5,000	)
		$3,369,700				$3,229,600				$140,100
Bank overdrafts (temporary)		$0				$86,500				$(86,500	)
Accounts payable		167,000				158,000				9,000
Income tax payable		26,000				35,000				(9,000	)
Accrued liabilities		55,000				41,000				14,000
Dividends payable		22,000				51,000				(29,000	)
Long-term notes payable		420,000				460,000				(40,000	)
Bonds payable		999,000				995,000				4,000
Preferred shares (Note 2)		486,000				380,000				106,000
Common shares		743,000				676,000				67,000
Retained earnings		451,700				347,100				104,600
		$3,369,700				$3,229,600				$140,100

Income Statement

Revenues
	Sales revenue		$1,005,000
	Investment income		90,000		$1,095,000
Expenses and Losses
	Cost of goods sold		315,000
	Sales commissions expense		110,000
	Operating expenses (Note 5)		166,000
	Salaries and wages expense		101,000
	Interest expense		97,000
	Loss on disposal of equipment (Note 4)		11,000
	Income tax expense		96,000		896,000
Net Income					$199,000

The following is additional information about Skysongs 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. Skysong 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, Skysong 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.

(a) Your answer is partially correct. Prepare the statement of cash flows for the year ended December 31, 2020,for Skysong 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-signeg.-15,000 or in parenthesis eg. (15,000). Do not leave any answer field blank. Enter Ofor amounts.) Skysong Inc. Statement of Cash Flows (Indirect Method) For the year ended December 31, 2020 Cash Flows from Operating Activities Net Income /(Loss) $ 199000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense - Equipment $ 166000 Loss on Sale of Equipment 11000 -90000 Increase in Accounts Receivable -57000 Decrease in Prepaid Insurance 16900 Increase in Inventory -43900 Decrease in Supplies 4000 -86500 Increase in Accounts Payable 9000 Decrease in Income Tax Payable -9000 Increase in Accrued Liabilities 14000 Dividends Paid -29000 Net Cash Used by Operating Activities Net Cash Used by Operating Activities Cash Flows from Investing Activities Gain on Sale of Equipment $ 3000 Purchase of Building -30000 - 10500 Purchase of Equipment -37600 Net Cash Used by Investing Activities -75100 Cash Flows from Financing Activities Dividends Paid LL -58900 -40000 Decrease in Accounts Pavable Proceeds from Issuance of Common Shares 4000 Purchase of Equipment 49000 Net Cash Used by Financing Activities -45900 Increase in Cash and Cash Equivalents -16500 Cash and Cash Equivalents Balance Dec. 31, 2019 96500 Cash and Cash Equivalents Balance Dec. 31, 2020 $ 80000 Non-cash investing and financing activities Non-cash investing and financing activities $ Additional disclosures: $ $ Cash and Cash Equivalents: 2020 2019 $ $ $ $ e Textbook and Media Save for Later Attempts: 1 of 5 used Submit