Bramble Limited, which follows IFRS, has adopted the policy of classifying interest paid as operating activities and
Question:
Bramble Limited, which follows IFRS, has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. Condensed financial data for 2020 and 2019 follow (in thousands):
Bramble LIMITED Comparative Statement of Financial Position December 31 | ||
2020 | 2019 | |
Cash | $ 2,010 | $ 1,150 |
FV-NI investments | 1,300 | 1,420 |
Accounts receivable | 1,860 | 1,370 |
Inventory | 1,610 | 1,955 |
Plant assets | 1,935 | 1,730 |
Accumulated depreciation | - 1,200 | - 1,170 |
$ 75,15 | $ 64,55 | |
Accounts payable | $ 1,310 | $ 970 |
Accrued liabilities | 240 | 290 |
Mortgage payable | 1,370 | 1,565 |
Common shares | 2,025 | 1,730 |
Retained earnings | 2,570 | 1,900 |
$ 75,15 | $ 6,455 |
Bramble LIMITED Income Statement Year Ended December 31, 2020 | ||
Sales | $ 6,880 | |
Cost of goods sold | 4,700 | |
Gross margin | 2,180 | |
Administrative expenses | 910 | |
Income from operations | 1,270 | |
Other expenses and gains | ||
Interest expense | $ (20) | |
Gain from disposal of plant assets | 260 | |
Gain on disposal of FV-NI investments | (80) | 60 |
Income before tax | 1,330 | |
Income tax expense | 405 | |
Net income | $ 925 |
Additional information:
During the year, $70 of common shares were issued in exchange for plant assets. No plant assets were sold in 2020. The FV-NI investments’ carrying amount and market value were the same at December 31, 2020.
- Prepare a statement of cash flows using the direct method. Show any additional information needs to be disclosed as a note to the statement of cash flows.
- Does Bramble Limited have any options on how to classify interest and dividends paid on the statement of cash flows?
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry