Statement of Cash Flows
Response to the following problem:
The following is a list of items for the 2010 statement of cash flows of the Witts Company:
1. Receipt from sale of equipment, $2,700 8. Loss on sale of equipment, $2,200
2. Increase in inventory, $3,900 9. Payment of dividends, $5,200
3. Net income, $13,500 10. Decrease in accounts receivable, $1,700
4. Payment for purchase of building, $29,000 11. Issuance of common stock for land, $6,900
5. Depreciation expense, $8,700 12. Decrease in accounts payable, $1,500
6. Receipt from issuance of bonds, $8,000 13. Beginning cash balance, $10,200
7. Increase in prepaid expenses, $800
Required
1. Prepare the statement of cash flows.
2. Under IFRS, what alternative treatment of the payment of dividends is allowed? How would this affect the statement of cash flows?