View Policies Current Attempt in Progress Teal Mountain 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 Teal Mountain Inc., and its statement of income for the year ending December 31, 2020, follow: December 31 2020 2019 Change Cash $41,000 $48,000 $(7,000 ) Cash equivalents (Note 1) 37,000 43,500 (6,500 ) Accounts receivable 349,000 284,000 65,000 Prepaid insurance 17,400 34,400 (17,000 ) Inventory 414,000 373,200 40,800 Supplies 13,000 17,000 (4,000 ) Long-term investment, at equity (Note 7) 421,000 408,900 12,100 Land (Note 6) 633,000 508,000 125,000 Buildings (Note 3) 1,310,000 1,280,000 30,000 Accumulated depreciationbuildings (400,000 ) (360,000 ) (40,000 ) Equipment (Note 4) 630,000 637,400 (7,400 ) Accumulated depreciationequipment (160,000 ) (135,000 ) (25,000 ) Patent 100,000 100,000 0 Accumulated amortization (40,000 ) (35,000 ) (5,000 ) $3,365,400 $3,204,400 $161,000 Bank overdrafts (temporary) $0 $86,500 $(86,500 ) Accounts payable 164,000 158,000 6,000 Income tax payable 26,000 35,000 (9,000 ) Accrued liabilities 55,000 42,000 13,000 Dividends payable 17,000 45,000 (28,000 ) 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 745,000 671,000 74,000 Retained earnings 453,400 331,900 121,500 $3,365,400 $3,204,400 $161,000 Income Statement Revenues Sales revenue $993,000 Investment income 90,000 $1,083,000 Expenses and Losses Cost of goods sold 314,000 Sales commissions expense 104,000 Operating expenses (Note 5) 166,000 Salaries and wages expense 104,000 Interest expense 98,000 Loss on disposal of equipment (Note 4) 11,000 Income tax expense 96,000 893,000 Net Income $190,000 The following is additional information about Teal Mountains 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. Teal Mountain 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, Teal Mountain 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) Prepare the statement of cash flows for the year ended December 31, 2020, for Teal Mountain 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 0 for amounts.) Teal Mountain Inc. Statement of Cash Flows (Indirect Method) $ Adjustments to reconcile net income to net cash provided by operating activities: $ $ $ Non-cash investing and financing activities $ Additional disclosures: $ $ Cash and Cash Equivalents: 2020 2019 $ $ $ $ eTextbook and Media Save for LaterAttempts: 0 of 5 usedSubmit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above.