he comparative statement of financial position of Credit Valley inc. as at December 31,2025 , and a statement of comprehensive income for the 2025 fiscal year follow. \begin{tabular}{l|r|} & \multicolumn{1}{c}{ Credit Valley Inc } \\ & Statement of Comprehensive Income \\ & For the year ended 12/31/2025 \\ \hline Net sales & \\ \hline Cost of goods sold & 415,000 \\ \hline Gross profit & 240,000 \\ \hline Operating expenses & 175,000 \\ \hline Income from operations & 120,000 \\ \hline Interest expense & 55,000 \\ \hline Income before income tax & 9,000 \\ \hline Income tax & 46,000 \\ \hline Net income & 6,000 \\ \hline Other comprehensive income & 40,000 \\ \hline Unrealized gain or loss-OCl & \\ \hline Comprehensive income & 2,000 \\ \hline \end{tabular} a. Credit Valley follows ASPE. b. Operating expenses include $12,000 in depreciation expense. c. There were no disposals of equipment during the year. d. Common shares were issued for cash. e. During the year, Credit Valley acquired $15,000 of equipment in exchange for long-term notes payable. f. Assume unexplained changes in accounts stem from logical transactions. Required: 1. Prepare the SCF, using the indirect method, using the template provided under the Excel tab titied Q3 Req 1 . Ensure that you link all 2. Prepare the operating section of the SCF only, using the direct method, using the femplate provided under the Excel tab titied Q3 Req 2 . A Requirement 1 B \begin{tabular}{l|ll} C & D & E \end{tabular} Credit Valley Inc. Cash Flow Statement For the year ended 12/31/2025 Operating activities: Net income Adjustments for non-cash items: $40,000 Depreciation and amortization Changes in net working capital: Accounts receivable increase Inventory increase Increase in prepaid expenses Accounts payable increase Income tax payable decrease Net cash flows from operations 40,000 Investing activities: Purchase of equipment Net cash flows used for investing Financing activities: Repayment of notes payable Common shares issued Cash dividends paid Net cash flows used for financing 0 Net increase (decrease) in cash Cash balance beginning of the year Cash balance end of the year \begin{tabular}{|r|r|} & 40,000 \\ & 38,000 \\ \hline$78,000 \\ \hline \end{tabular} Requirement 2 Credit Valley Inc. Cash Flow Statement For the year ended 12/31/2025 Operating activities: Cash received from customers(1) Cash paid to suppliers (2) Cash paid for operating expenses (3) Cash paid for interest Cash paid for income tax (4) Net cash flows from operations 0
