Reference no: EM132834202

Question - Financial Jungle Inc. (FJI), a public company, has gathered the following information to prepare its statement of cash flows for the year ended December 31, 2020:

New equipment costing $55,000 was purchased during the year by issuing a $25,000 note payable and paying the balance in cash.

Old equipment with an original cost of $75,000 and accumulated depreciation of $36,000 was sold at a loss of $2,500 during the year.

FJI reported net income of $125,000 for the year.

FJI had beginning retained earnings for the year of $623,500 and ending retained earnings of $625,000.

FJI reported depreciation expense of $67,450 for the year.

FJI issued bonds during the year with a face value of $300,000 at a premium of $11,250.

FJI paid $132,000 during the year for a 25% interest in one of its suppliers.

FJI repaid a $25,000 bank loan during the year.

FJI reports dividends paid as a financing activity in its statement of cash flows.

Required -

a) Determine the net cash provided by (used in) investing activities to be reported on FJI's 2020 statement of cash flows.

b) Determine the net cash provided by (used in) financing activities to be reported on FJI's 2020 statement of cash flows.

c) Using IFRS, dicuss the similarities and differences between the direct and indirect methods used to report cash flows arising from operating, investing and financing activities.