Reference no: EM132587520
Question - KLM4's income statement for the year ended October 31, 2020, had the following condensed information:
Service revenue $785,000
Operating expenses (excluding depreciation) $481,000
Depreciation expense $65,000
Loss on disposal of equipment $14,900
KLM4's statement of financial position included the following comparative data at year end:
FV-NI investments
$20,000- 2019
$18,000-2020
Accounts receivable
$25,900-2019
$18,700-2020
Accounts payable
$31,000-2019
$41,100-2020
Income tax payable
$6,900-2019
$6,200-2020
Additional Information:
- No Investments or other assets were sold other than noted above
- The company uses FIFO for inventory valuation and uses tax guidelines for all other assets and liabilities
- The company uses a Line of Credit as a floating debt facility and this year they were in a negative cash position
- The companies tax rate is 30% for the current year
Required -
1. Prepare the operating activities section of the statement of cash flows using the direct method.
2. Discuss the notes that would be relevant to preparing a Statement of Cash Flows noting any differences that are relevant between ASPE and IFRS.