Problem: Cannon Company has the following information for the year ending December 31, 2015.
- Long term debt of $18,000 was issued for cash.
- Cash paid for labor during 2015 amounted to $489,500.
- During the year, Cannon experienced a pension outflow of $14,000.
- Dividends of $34,000 were received.
- Cannon's cash balance at the beginning of 2015 was $975,000; at the end of 2015 the cash was $839,500.
- The company made an investment of $310,000 in an affiliate company.
- A lease payment of $110,000 was made on November 1, 2015. There is no asset recorded in connection with the lease.
- During the year, Cannon collected $780,000 cash from customers.
- Cash paid for income taxes amounted to $56,000 for all of 2015.
- During 2015, Cannon discontinued its consumer electronics division. The business was sold resulting in a $12,000 net cash inflow.
1. Prepare Cannon Company's statement of cash flows for the year ending December 31, 2015 using the indirect method.
2. Explain how the indirect statement of cash flows that you prepared would differ under IFRS rules. Assume this is a nonfinancial entity.