Question

The statement of cash flows for the year ended December 31, 2021, for Bronco Metals is presented below. BRONCO METALS Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Collections from customers $ 408,000 Interest on notes receivable 5,100 Dividends received from investments 3,500 Purchase of inventory (197,000) Payment of operating expenses (70,000) Payment of interest on notes payable (9,100) Net cash flows from operating activities Cash flows from investing activities: Collection of notes receivable 155,000 Purchase of equipment (264,000) Net cash flows from investing activities Cash flows from financing activities: Proceeds from issuance of common stock 310,000 Dividends paid to shareholders (51,000) Net cash flows from financing activities Net increase in cash Cash and cash equivalents, January 1 Cash and cash equivalents, December 31 $ 140,500 (109,000) 259,000 290,500 27,500 $ 318,000 Required: Prepare the statement of cash flows assuming that Bronco prepares its financial statements according to International Financial Reporting Standards. Where IFRS allows flexibility, use the classification used most often in IFRS financial statements. (Amounts to be deducted should be indicated with a minus sign.) BRONCO METALS Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities:

Answer 1

IFRS allows more flexibility in preparation of cash flow statement than US GAAP. Under IFRS, companies have the option to report interest and dividends paid as either operating or financing cash flows and interest and dividends received as either operating or investing cash flows. Generally, interest and dividend paid are recorded as financing activities and when these are received, they are recorded as investing activities

BRONCO METALS
Statement of Cash Flows
For the Year Ended December 31, 2021
Cash flows from operating activities:
Collections from customers	$408,000
Purchase of inventory	-197,000
Payment of operating expenses	-70,000
Net cash flows from operating activities		$141,000
Cash flows from investing activities:
Interest on note receivable	5,100
Dividends received from investments	3,500
Collection of note receivable	155,000
Purchase of equipment	-264,000
Net cash flows from investing activities		-100,400
Cash flows from financing activities:
Payment of interest on note payable	-9,100
Proceeds from issuance of common stock	310,000
Dividends paid	-51,000
Net cash flows from financing activities		249,900
Net increase in cash		290,500
Cash and cash equivalents, January 1		27,500
Cash and cash equivalents, December 31		$318,000