Surf Company follows IFRS for its external financial reporting. The following amounts were available at December 31, 2013:Interest paid $22,000Dividends paid 16,000Taxes paid 37,000Under IFRS, what is the maximum amount that could be reported for cash used by operating activities for Surf Company for the year ended December 31, 2013?
A) $59,000
B) $38,000
C) $53,000
D) $75,000

Question

Quizplus · Accepted Answer

Under IFRS, interest paid and dividends paid can be classified either as operating activities or financing activities. Taxes paid are generally classified as operating activities. Therefore, the maximum amount that could be reported for cash used by operating activities is the sum of all three: $22,000 (interest paid) + $16,000 (dividends paid) + $37,000 (taxes paid) = $75,000.

Surf Company Follows IFRS for Its External Financial Reporting