Windsor 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 Windsor Inc., and its statement of income for the year ending December 31, 2020, follow: December 31 2020 2019 Change Cash $47,000 $53,000 $(6,000) Cash equivalents (Note 1) 32,000 42,300 (10,300) Accounts receivable 346,000 288,000 58,000 Prepaid insurance 16,900 32,100 (15,200) Inventory 400,000 359,200 40,800 Supplies 13,000 17,000 (4,000) Long-term investment, at equity (Note 7) 415,000 404,200 10,800 Land (Note 6) 631,000 511,000 120,000 Buildings (Note 3) 1,310,000 1,280,000 30,000 Accumulated depreciation-buildings (400,000) (360,000) (40,000) Equipment (Note 4) 634,000 641,900 (7,900) Accumulated depreciation equipment (160,000) (135,000) (25,000) Patent 100,000 100,000 -0- Accumulated amortization (40,000) (35,000) (5,000) $3,344,900 $3,198,700 $146,200 Bank overdrafts (temporary) $0 $86,300 $(86,300) Accounts payable 167,000 160,000 7,000 Income tax payable 26,000 35,000 (9,000) Accrued liabilities 58,000 46,000 12,000 Dividends payable 17,000 48,000 (31,000) 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 749,000 676,000 73,000 Retained earnings 422,900 312,400 110,500 $3,344,900 $3,198,700 $146,200 Income Statement Revenues Sales revenue $993,000 Investment income 90,000 $1,083,000 Expenses and Losses Cost of goods sold 317,000 Sales commissions expense 104,000 Operating expenses (Note 5) 166,000 Salaries and wages expense 106,000 93,000 Interest expense 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 Windsor'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. Windsor 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. During the year, Windsor obtained land with a fair value of $100,000 in exchange for its preferred shares. 6. 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. Prepare the statement of cash flows for the year ended December 31, 2020, for Windsor 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.) Windsor Inc. Statement of Cash Flows (Indirect Method) For the year ended December 31, 2020 Cash Flows from Operating Activities . $ Adjustments to reconcile net income to net cash provided by operating activities: + $ ta ta + $ $ Non-cash investing and financing activities $ Additional disclosures: $ $ Cash and Cash Equivalents: 2020 2019 + $ $ $ $
