Question #2 (20 marks) Comparative statement of financial position accounts of Traduce Inc., (based on IFRS), follow: December 31 Debit accounts Cash AR Inventory 2018 $ 37,000 67,500 30,000 2017 $ 33,750 60,000 24,000 Long-term investments Buildings Machinery Land 23,250 67,500 30,000 7,500 $262,750 40,500 56,250 18,750 7,500 $240,750 Credit accounts Allowance for Bad debts (AFBD) Acc. Dep-Buildings Acc. Dep - Machinery $ 2,250 13,500 5,625 $ 1,500 9,000 2,250 AP Accrued payables Tax/P 30,000 2,375 1,000 24,750 1,125 1,500 Long-term NP (financial) C/S RE 26,000 150,000 32,000 $262,750 31,000 125,000 44,625 $240,750 Additional information; Cash dividends were declared and paid during the year. A 20% stock dividend was declared during the year and $25,000 of R/E was capitalized. Investments that cost $20,000 and had a fair value at December 31, 2017, of $24,750 were sold during the year for $23,750. Machinery that cost $3,750 and had $750 of depreciation accumulated was sold for $2,200. Traduce's 2018 1/S is as follows: Sales revenue CGS $640,000 380.000 260,000 GP 180,450 79,550 Operating expenses (includes $8,625 Dep. Expense and $5,400 bad debt exp) Income from operations Unrealized loss on investments $(1,000) Loss of sale of Machinery _(800) EBT Tax expense (1,800) 77.750 40,000 NI $ 37,750 Required: a. Prepare CFS using the INDIRECT method (14 marks) b. Prepare CFO using the DIRECT method (6 marks)