Cash Flows from Operating Activities – Indirect Method
Titiki Ltd $\quad$

Cash flows from operating activities – indirect method
Titiki Ltd. had the following comparative statement of financial position:
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Titiki Ltd.
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ Comparative Statement of Financial Position
$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ As at December 31
$\begin{array}{c}\begin{array}{lll} \text {Cash}\\ \text {Accounts receivable}\\ \text {Inventories}\\ \text {Prepaid insurance}\\ \text {Equipment}\\ \text {Accumulated depreciation-equipment}\\ \text {Total assets}\\\\ \text {Accounts payable}\\ \text {Wages payable}\\ \text {Income taxes payable}\\ \text {Long-term note payable}\\ \text {Common shares}\\ \text {Retained earnings}\\ \text {Total liabilities and shareholders' equity}\end{array}\begin{array}{r}\underline{2020} \\\$ 20,500 \\34,000 \\20,000 \\2,500 \\102,000 \\\underline{ (22,500)} \\\underline{ \$ 156,500 }\\\\\$ 23,000 \\4,000 \\2,000 \\4,000 \\30,000 \\65,000 \\\underline{ 28,500 }\\\underline{ \$ 156,500} \end{array}\begin{array}{r}\underline{2019} \\\$ 12,500 \\25,500 \\30,000 \\2,000 \\90,000 \\\underline{(12,500) }\\\underline{\$ 147,500 }\\\\\$ 20,000 \\2,000 \\3,000 \\5,000 \\34,500 \\65,000 \\\underline{18,000} \\\underline{ \$ 147,500 }\\\end{array}\end{array}$

Additional information:
•Net income for the fiscal year was $13,500.
•Equipment that cost $10,000 and was sold for a gain of $1,000 during 2020. The equipment’s accumulated depreciation was $7,000.
Prepare the operating activities section of a statement of cash flows using the indirect method.