Financial information for Robinson Inc. follows:

Additional information: 

■ Ordinary shares were redeemed during the year at their book value. 

■ The face value of the bonds is $400,000; they pay a coupon rate of 7% per annum. The effective rate of interest is 6% per annum. 

■ Net income was $100,000. 

■ There was an ordinary stock dividend valued at $20,000 and cash dividends were also paid. 

■ Interest expense for the year was $100,000. Income tax expense was $50,000. 

■ Robinson arranged for a $500,000 bank loan to finance the purchase of equipment.

■ Robinson sold equipment with a net book value of $150,000 (original cost $200,000) for $180,000 cash. 

■ Robinson leased right-of-use equipment valued at $250,000. 

■ Robinson has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating activities. 

Required:

a. Prepare a statement of cash flows for the year ended December 31, 2021, using the indirect method. 

b. Discuss how the transaction(s) above that are not reported on the statement of cash flows are reported in the financial statements.

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Assets Cash Robinson Inc. Balance Sheets As at December 31 Accounts receivable Inventory Investments held to meet short-term cash commitments Investments financial asset at amortized cost Property, plant, and equipment Accumulated depreciation Total Liabilities and shareholders' equity Accounts payable Bank loans Bonds payable Preferred shares Ordinary shares Retained earnings Total 2021 $ 600,000 1,100,000 400,000 200,000 100,000 4,200,000 (2,000,000) $ 4,600,000 $ 100,000 2,700,000 413,860 300,000 300,000 786,140 $4,600,000 2020 $ 400,000 1,300,000 600,000 3,400,000 (1,500,000) $4,200,000 $ 150,000 2,400,000 416,849 400,000 833,151 $4,200,000