The analysis of the registers of the company Halibout reveals the following for the 2017 financial year: a) Purchase of $ 20,000 of equipment and issuance of common shares as payment to the owner b) Purchase of non-current investments for a cash amount of $ 15,000 c) Dividends of $ 12,000 paid in cash d) Sales of equipment used in production for a net amount of $ 7,000 in cash (costs $ 21,000, cumulative depreciation of $ 15,000) e) Issue of 500 shares at $ 12 each, for cash.

Summary statement of income for the year ended December 31, 2017 (In Canadian dollars)

Sales 140,000 Cost of sales (59,000) Amortization (3,000) Salaries (29,000) Interest (5,000) Gains on disposal of equipment 1,000 Other charges (15,800) Income taxes (9,000) Net income 20,200

Summary statement of financial position at December 31 (In Canadian dollars)

2017 2016

Cash 19,200 20,500 Customers 22,000 22,000 Stocks 75,000 68,000 Current assets 116,200 110,500 Investments 15,000 - Equipment 113,500 114,500 Accumulated amortization (20,000) (32,000) Total assets 224,700 193,000

Suppliers 14,000 17,000 Salaries payable 1,500 2,500 Taxes payable 4,500 3,000 Bonds payable 54,000 54,000 Ordinary shares 126,000 100,000 Retained earnings 24,700 16,500 Total liabilities and equity 224,700 193,000

Halibout has chosen to classify interest expense as an operating activity and dividends paid as a fundraising activity.

WORK TO DO Prepare the cash flow statement using the indirect method.