Question 3. The company below follows IFRS and has adopted the policy of classifying dividends paid as financing activities and interest paid as part of their operating activities. 20x3 $ DISCOVERY COMPANY Statement of Financial Position As of 31 December 20X4 Assets Current assets: Cash $ 26,000 Accounts receivable 723,800 Inventory 590,400 Total current assets 1,340,200 Land 492,000 Plant and equipment 2,474,100 Less: Accumulated depreciation (1,258,000) Patents 130,800 Current liabilities: 22,600 692, 100 537, 900 1, 252,600 211, 900 1,707, 900 (1,240, 300) 137,000 $ Accounts payable Salaries and wages payable Income tax payable Total current liabilities Long-term debt Total liabilities Shareholders' equity: Common shares, no-par Retained earnings 407,600 64,200 150, 200 622,000 1,558,600 2,180,600 446, 700 59,400 140, 100 646, 200 840, 200 1,486, 400 257,200 741,300 254,200 328,500 5, 225, 200 DISCOVERY COMPANY Statement of Comprehensive Income For the year ended 31 December 20X4 Sales revenue Less expenses: Cost of goods sold $ 2,882,300 Selling and administrative expenses 769, 700 Depreciation and amortization 261,300 Rent expense 21,200 Miscellaneous expenses 200, 700 Total expenses Other revenues and expenses: Interest expense 48,900 Gain on sale of equipment (8,500) LOSS on debt retirement 15,600 Earnings before income tax Income tax expense Net earnings and comprehensive income 4, 135, 200 56,000 1,034,000 440, 200 593,800 $ a. The company sold equipment that had an original cost of $412,200 and a net book value of $174,800. Other equipment was purchased for cash. Patent amortization was $6,200. b. Long-term debt with a face value of $620,000 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 Required: 12 Marks Prepare the SCF, using the direct method