Reference no: EM133169181
Question - The income statement and additional data of Kratz Photography Ltd.? follow:
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Kratz Photography Ltd. Income Statement For the Year Ended December 31, 2020
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Revenues:
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Consulting revenue
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$155,000
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Expenses:
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Salaries expense
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$88,000
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Amortization expense
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14,500
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Rent expense
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6,000
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Office supplies expense
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2,500
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Insurance expense
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2,200
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Interest expense
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1,000
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Income tax expense
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9,500
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123,700
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Net income
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$31,300
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a. Collections from clients are $4,700 more than revenues.
b. Increase in cash balance, $9,500.
c. Payments to employees are $5,000 less than salaries expense.
d. Interest expense and income tax expense equal their cash amounts.
e. Acquisition of property, plant, and equipment is $64,000. Of this amount, $54,000 is paid in cash, $10,000 by signing a long-term note payable.
f. Cash received from sale of land, $9,000.
g. Cash received from issuance of common shares, $23,000.
h. Payment of long-term note payable, $14,000.
i. Payment of cash dividends, $6,500.
j. Payments for rent and insurance are equal to expense.
k. Payment for office supplies is $3,500 more than expense.
l. Opening cash balance, $14,000.
Required -
1. Prepare Kratz Photography Ltd.'s cash flow statement by the direct method for operating activities and a note to the financial statements providing a summary of non-cash investing and financing activities.
2. Assume Kratz Photography Ltd. has adopted IFRS. What would be the difference in the cash flow statement using this framework?