Acc302 Intermediate Accounting: E22-3 The following is a list of items for the 2010 (Witts Company)

Acc302 Intermediate Accounting 
E22-4 Statement of Cash Flows 
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 

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? 
Under IFRS, the payment of (1) may be classified as either a cash (2) for (3) activities or a cash (4) for (5) activities. If it is classified as a cash outflow for (6) activities, Witt Company would report net cash provided by operating activities of $14,700 ($19,900 - $5,200) and net cash provided by (7) activities of $8,000. 
Complete the paragraph above by selecting the word, number or phrase that best fits the corresponding number (you may use the answer more than once).