The financial statements of Hardy Ltd for the 20X1 fiscal year follow (in thousands) Statement of Comprehensive Income, for the Year Ended 31 December 20X1 Sales $ 19,100 Cost of goods sold 12,500 Gross profit 6,600 Depreciation expense 860 Selling and administrative expenses 1,450 Goodwill impairment 2,000 Interest expense 440 Loss on sale of fixed assets 370 Earnings before income tax 1,480 Income tax expense 200 Earnings and comprehensive income $ 1,280 Statement of Changes in Equity, for the Year Ended 31 December 20X1 Common shares Preferred Shares Contd Capital Options Contd Capital Preferred Share Retirement Retained Earnings Opening balance $ 1,450 $ 1,200 $ 320 $ 400 $ 1,950 Comprehensive income 1,280 Dividendscash (75 ) Dividendsstock 200 (200 ) Share issuance fixed assets 710 Share issuance options 50 (45 ) Options recorded 100 Share retirement (600 ) 100 Share retirement (400 ) (180 ) Closing balance $ 2,010 $ 600 $ 375 $ 500 $ 2,775 Statement of Financial Position, Year Ended December 31 20X1 20X0 Assets Cash $ 145 $ 200 Accounts receivable (net) 1,600 720 Inventory 1,615 820 Fixed assets 9,820 7,560 Accumulated depreciation (4,120 ) (3,500 ) Goodwill 2,000 Total $ 9,060 $ 7,800 Liabilities and shareholders equity Accounts payable and accrued liabilities $ 625 $ 560 Income taxes payable 30 40 Notes payable 130 25 Bonds payable 700 700 Discount on bonds payable (30 ) (45 ) Deferred income tax 1,345 1,200 Common shares, no par 2,010 1,450 Preferred shares, no par 600 1,200 Contributed capital stock options 375 320 Contributed capital preferred share retirement 500 400 Retained earnings 2,775 1,950 Total $ 9,060 $ 7,800 Additional information There is a stock option plan for executives, on which $100 of expense was recorded Options were exercised during the year Machinery was acquired in exchange for common shares during the year Other fixed assets were acquired for cash Fixed assets with an original cost of $900 and a net book value of $660 were sold at a loss of $370 Assume unexplained changes in accounts are from normal transactions Required 1 Prepare the SCF, using the two step indirect method in the operating activities section (Assume that dividends paid are financing activities, and assume that interest paid and received, and dividends received, are operating transactions List cash outflows as negative amounts Enter your answers in thousands) Answers that are available for the Accounts Accounts payable and accrued liabilities decrease Accounts payable and accrued liabilities increase Accounts receivable decrease Accounts receivable increase Amortization of discount on bond Cash dividend paid Cash, beginning of year Cash, end of year Common shares issued Common shares retired Compensation expense recorded stock options Decrease in cash and cash equivalents Decrease in deferred income tax Decrease in notes payable Depreciation and Amortization Earnings Fixed assets purchased Gain on sale of fixed assets Impairment Increase in cash and cash equivalents Increase in deferred income tax Increase in notes payable Inventory decrease Inventory increase Loss on sale of fixed assets Preferred shares issued Preferred shares retired Sale of Fixed assets Taxes payable decrease Hardy Limited Statement of Cash Flows Year Ended 31 December 20X1 Cash provided by (used in) operating activities Add (deduct) items not involving cash 0 Changes in SFP accounts $ 0 Cash provided by (used in) investing activities 0 Cash provided by (used in) financing activities 0 $ 0 Hardy Limited Statement of Cash Flows Year Ended 31 December 20X1 Cash provided by (used in) operating activities Add (deduct) items not involving cash 0 Changes in SFP accounts $ 0 Cash provided by (used in) investing activities 0 Cash provided by (used in) financing activities 0 $ 0

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The financial statements of Hardy Ltd. for the 20X1 fiscal year follow (in thousands): Statement of Comprehensive Income, for the Year Ended 31 December 20X1:

The financial statements of Hardy Ltd. for the 20X1 fiscal year follow (in thousands):

Statement of Comprehensive Income, for the Year Ended 31 December 20X1:
Sales	$	19,100
Cost of goods sold		12,500
Gross profit		6,600
Depreciation expense		860
Selling and administrative expenses		1,450
Goodwill impairment		2,000
Interest expense		440
Loss on sale of fixed assets		370
Earnings before income tax		1,480
Income tax expense		200
Earnings and comprehensive income	$	1,280

Statement of Changes in Equity, for the Year Ended 31 December 20X1:

	Common shares			Preferred Shares				Contd Capital: Options				Contd Capital: Preferred Share Retirement			Retained Earnings
Opening balance	$	1,450			$	1,200			$	320			$	400		$	1,950
Comprehensive income																	1,280
Dividendscash																	(75	)
Dividendsstock		200															(200	)
Share issuance; fixed assets		710
Share issuance; options		50								(45	)
Options recorded										100
Share retirement						(600	)							100
Share retirement		(400	)														(180	)
Closing balance	$	2,010			$	600			$	375			$	500		$	2,775

Statement of Financial Position, Year Ended

December 31	20X1			20X0
Assets:
Cash	$	145		$	200
Accounts receivable (net)		1,600			720
Inventory		1,615			820
Fixed assets		9,820			7,560
Accumulated depreciation		(4,120	)		(3,500	)
Goodwill					2,000
Total	$	9,060		$	7,800
Liabilities and shareholders equity:
Accounts payable and accrued liabilities	$	625		$	560
Income taxes payable		30			40
Notes payable		130			25
Bonds payable		700			700
Discount on bonds payable		(30	)		(45	)
Deferred income tax		1,345			1,200
Common shares, no-par		2,010			1,450
Preferred shares, no-par		600			1,200
Contributed capital: stock options		375			320
Contributed capital: preferred share retirement		500			400
Retained earnings		2,775			1,950
Total	$	9,060		$	7,800

Additional information:

There is a stock option plan for executives, on which $100 of expense was recorded. Options were exercised during the year.
Machinery was acquired in exchange for common shares during the year. Other fixed assets were acquired for cash.
Fixed assets with an original cost of $900 and a net book value of $660 were sold at a loss of $370.
Assume unexplained changes in accounts are from normal transactions.

Required: 1. Prepare the SCF, using the two-step indirect method in the operating activities section. (Assume that dividends paid are financing activities, and assume that interest paid and received, and dividends received, are operating transactions. List cash outflows as negative amounts. Enter your answers in thousands).

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Answers that are available for the Accounts :

- Accounts payable and accrued liabilities decrease

- Accounts payable and accrued liabilities increase

- Accounts receivable decrease

- Accounts receivable increase

- Amortization of discount on bond

- Cash dividend paid

- Cash, beginning of year

- Cash, end of year

- Common shares issued

- Common shares retired

- Compensation expense recorded stock options

- Decrease in cash and cash equivalents

- Decrease in deferred income tax

- Decrease in notes payable

- Depreciation and Amortization

- Earnings

- Fixed assets purchased

- Gain on sale of fixed assets

- Impairment

- Increase in cash and cash equivalents

- Increase in deferred income tax

- Increase in notes payable

- Inventory decrease

- Inventory increase

- Loss on sale of fixed assets

- Preferred shares issued

- Preferred shares retired

- Sale of Fixed assets

- Taxes payable decrease

Hardy Limited Statement of Cash Flows Year Ended 31 December 20X1 Cash provided by (used in) operating activities Add (deduct) items not involving cash: 0 Changes in SFP accounts: $ 0 Cash provided by (used in) investing activities 0 Cash provided by (used in) financing activities 0 $ 0 Hardy Limited Statement of Cash Flows Year Ended 31 December 20X1 Cash provided by (used in) operating activities Add (deduct) items not involving cash: 0 Changes in SFP accounts: $ 0 Cash provided by (used in) investing activities 0 Cash provided by (used in) financing activities 0 $ 0