Reference no: EM133016915

Question - Selected accounts from the SFP of Iraj Ltd. at 31 December 20X5 and 20X4 are presented below, in thousands. Iraj reported earnings of $810 in 20X5, and depreciation expense was $195. Bonds of $150 par value were issued during the period for $135 and a discount of $15 was originally recorded.

As at 31 December 20X5 20X4

Accounts receivable $308 $410

Inventory 352 276

Accounts payable 260 301

Interest payable 52 25

Deferred income tax liability 179 135

Bonds payable 790 640

Discount on bonds payable (30) (27)

Required -

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

2. Calculate cash paid for interest and income tax, assuming that interest expense is $151 and income tax expense is $188. (Enter your answers in thousands.)