Direct and Indirect methods). Please include t-accounts for plant and equipment, accumulated depreciation, land, long-term debt, common stock and retained earnings. Journal entries should be included for asset sales. Note: Loss on debt retirement is treated the same as a loss on an asset.

DISCOVERY CO. Statement of Financial Position As of 31 December 20X4 20X3 Assets Current assets: Cash $ 37,000 $ 32,000 Accounts receivable 1,030,000 980,000 Inventory 840,000 761,600 Total current assets 1,907,000 700,000 Land Plant and equipment 3,520,000 1,773,600 300,0070 2,418,000 (1,756,000) 194.000 Less ccumulated depreciation (1,781,600) Patents 186.000 Total assets $4,531,400 $2,929,600 Liabilities and Shareholders' Equity Liabilities: Current liabilities: $ 580,000 $ 632,400 Accounts payable Salaries and wages payable Income tax payable 91,400 84,200 213.800 198,600 885,200 915,200 Total current liabilities Long-term debt 2.218,000 1.190.000 2.105.200 3,103,200 Total liabilities Shareholders' equity: Common shares, no par Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 360,000 464.400 366.000 1.062.200 1.428.200 $4.531,400 824.400 $2.929.600 For the year ended 31 December 20X4 Sales revenue $7,400,000 Less expenses: Cost of goods sold Selling and administrative expenses Depreciation and amortization $4,082,000 1,090,000 370,000 Rent expense 30.000 Miscellaneous expenses 284,000 Total expenses 5,856,000 Other revenues and expenses: Interest expense 69,200 Gain on sale of equipment (12,000) Loss on debt retirement 22.000 79200 Earnings before income tax Income tax expense 1,464,800 623.600 $ 841,200 Net earnings and comprehensive income dditional information: a. The company sold equipment that had an original cost of $584,000 and a net book value of $247,600. Other equipment was purchased for cash. Patent amortization was $8,000. b. Long-term debt with a face value of $800,000 was repaid during the year and other long-term debt was issued at a lower interest rate, c. The company issued shares for land during the period. Other common shares were retired (bought back and cancelled) at book value. d. Assume unexplained changes in accounts stem from logical transactions. Required: I 1. Prepare the SCF, using the indirect method. Use the two-step method for operations. Omit the separate disclosure of cash flows for interest, investment income, and income tax. 2. Prepare the SCF, using the direct method to present cash flows in the operating activities section. excel