2 [20 marks] The consolidated statement of financial position and consolidated statement of comprehensive income for Hyson Inc. are provided below. Consolidated Statement of Financial Position As of December 31 ($000) 2018 2017 Assets Cash 1,139 792 Accounts receivable 8,910 5,940 Inventory 4,950 9,653 Debt investment 1,220 1,080 Investment in associate 12,375 11,983 PPE -Net [Note] 11,286 4,208 Intangible asset 1,123 1,439 Goodwill 190 0 Total assets 41,193 35,095 Liabilities Accounts payable 1,238 9,356 Interest payable 539 295 Income tax payable 1,980 2,950 Deferred tax liability 44 16 Long-term loans 8,370 5,146 Lease liability 911 0 Total liabilities 13,082 17,763 Equity Share capital 11,825 5,188 Other comprehensive income 176 64 Retained earnings 16,110 12,080 Total equity 28,111 17,332 Total equity and liabilities 41,193 35,095 Note: PPE -Net includes legally owned assets and leased assets. Consolidated Statement of Comprehensive Income For the year ended December 31, 2018 Sales revenue Cost of sales Depreciation expense Amortization expense Salaries expense Interest expense Interest revenue Loss on disposal of PPE Share of profit of associates Profit before income tax Income tax expense Net Income Other comprehensive income: (5000) 30,172 (16,015) (2,228) (316) (4,505) (1,380) 50 (121) 1,760 7,417 (1,479) 5,938 Fair value increase of debt investment (net of tax) Total comprehensive income Additional information: 112 6,050 a) Hyson acquired 100% of equity interests in Springtime Ltd. during 2018. The considerations of the acquisition included cash and 1,000,000 common shares with the market value of $2.20 per share. Hyson recognized goodwill, as the value of considerations exceeded the fair value of identifiable assets and liabilities acquired from Springtime (shown below). (S000) Cash 198 Accounts receivable 495 Inventory 505 PPE 3,218 Accounts payable 516 Long-term loans 890 b) Hyson leased a machine for use in its operations for four years, with the commencement date of January 1, 2018. The fair value of the machine was equal to present value of future lease payments. The annual lease payment of $400,000 was paid at the end of each year during the lease term. The relevant present value annuity factor (based on the interest rate implicit in the lease of 15% and four payments in arrears) is 2.850. c) Hyson sold a property in August 2018. The carrying amount of the property disposed of was $732,000. Hyson also purchased a property during the year. d) Hyson owned 20% of share ownership in Alpha Green Co. (purchased in 2016). This equity investment in associate is accounted for under equity method. No addition or disposal of the investment occurred during 2018. e) Hyson held the 5-year bond (purchased in 2017) with face value of $1,000,000 and coupon rate of 5% per annum paid at the year end. The effective interest rate at issuance was 5%. The bond is accounted for as a debt investment measured at fair value through other comprehensive income. The change in the carrying amount of the debt investment was due to the increase in its market value during the year. According the tax rule, any gains (losses) on the debt instrument are taxable (deductible) only when realized. The applied tax rate is 20%. Required: Based on indirect method, prepare the consolidated statement of cash flows for the year ended December 31, 2018