Bonilla
Corp., which uses IFRS, had the following activity in its most recent year of
operations:
1.
Purchase of equipment
2.
Redemption of bonds
3.
Conversion of bonds into common shares
4.
Sale of building
5.
Depreciation of equipment
6.
Exchange of equipment for furniture of equal fair value
7.
Issue of common shares
8.
Amortization of intangible assets
9.
Purchase of company’s own shares
10.
Issue of bonds for land
11.
Impairment loss on goodwill
12.
Holding loss on investment accounted at fair value with gains and losses in net
income
13.
Payment of dividends on common shares
14.
Increase in interest receivable on notes receivable
15.
Pension expense in excess of amount funded
16.
Signing of a finance lease agreement for equipment
17.
Payment of a monthly finance lease obligation
18.
Purchase of a treasury bill as a cash equivalent
19.
Payment on an operating lease agreement
20.
Holding gain accrued on FV-NI equity security investments
21.
Redemption of preferred shares classified as debt
22.
Payments of principal on an operating line of credit
23.
Payment of interest on an operating line of credit
Bonilla
Corp. has adopted the policy of classifying dividends received as operating
activities, dividends paid as operating activities, interest received as
investing activities, and interest paid as a financing activity on the cash
flow statement.
Instructions
Using
the indirect method, classify the items as
(a)
An operating activity, added to net income;
(b)
An operating activity, deducted from net income;
(c)
An investing activity;
(d)
A financing activity;
(e)
A significant non-cash investing or financing activity; or
(f)
None of these options.
Where
there are choices or options in the classification, provide details of the
options available.
(1) (c) Investing activity.
(2) (d) Financing activity for redemption cash paid (1
or 2) operating add to income any loss and deduct from income any gain
resulting from the redemption.
(3) (e) Significant non-cash investing and investing
activity.
(4) (c) Investing activity for any cash proceeds
received from the sale, (1 or 2) operating add to income any loss and deduct
from income any gain resulting from the sale.
(5) (a) Operating—add to net income.
(6) (e) Significant non-cash investing activity. (1 or
2) If any gain is recorded on the exchange, deduct from income in operating
activities and add back any loss.
(7) (d) Financing activity.
(8) (a) Operating—add to net income.
(9) (d) Financing activity.
(10) (e) Significant non-cash investing and financing
activity.
(11) (a) Operating—add to net income.
(12) (a) Operating—add to net income.
(13) (a) Operating activity on account of the choice
made by management.
(14) (b) Operating—deduct from net income.
(15) (a) Operating—add to net income.
(16) (e) Significant non-cash investing and financing
activity.
(17) (d) Financing activity for principal paid on lease
obligation; financing activity for interest paid; operating add to income for
the interest expense.
(18) (f) None of these options; part of cash and cash
equivalents.
(19) (f) Operating activity already reflected in the
income statement so no adjustment to income is required.
(20) (a) Operating—deduct from net income.
(21) (d) Financing activity.
(22) (d) Financing activity.
(23) (d) Financing activity.
