Based on the information set out in problem PA-46 below, prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

Data from PA-46

Tymen Ltd.Income StatementFor the Year Ended December 31, 2019Sales ..................................................................................? ? $3,218,575Cost of goods sold ........................................................... ? ?1,649,125Gross profit .......................................................................? ? 1,569,450Depreciation of PPE .......................................................... ? ? 318,700Patent impairment ............................................................ ? ? ? 40,000Interest expense??bonds ................................................. ? ? ? 36,000Interest expense??finance lease ...................................... ? ? ? ?4,500Other expenses ..................................................................? ? ? 735,750Operating income ...............................................................? ? ?434,500Investment income??associate ......................................... ? 288,000Income before income taxes ............................................. ? 722,500Income taxes ....................................................................... ? ?293,000Net income .......................................................................... $ 429,500

Additional information:

• Tymen has adopted a policy of classifying cash inflows and outflows from interest and dividends as operating activities.
• Tymen did not elect to designate its at fair value through profit or loss investments as cash equivalents.
• Tymen accounts for its investment in an associate using the equity method.
• The company nets many items to ??Other Expenses??; for example, gains and losses on fixed asset sales.
• During the year Tymen acquired PPE with a fair value of $100,000 under a finance lease.
• 90,000 ordinary shares and 10,000 preferred shares were issued to acquire $110,000 of PPE.
• Tymen successfully defended its right to a patent. Related expenditures totalled $18,000.
• The decrease in the bonds payable account was due to the amortization of the premium.
• Property, plant, and equipment costing $420,000 was sold for $75,000.

Transcribed Image Text:

Tymen Ltd. Comparative Balance Sheet As at December 31, 2018 and 2019 2019 2018 Cash $ 91,000 $ 85,000 At fair value through profit or loss investments 11,000 13,000 Accounts receivable (net) 406,000 374,000 Inventory 501,000 522,000