The statement of financial position, statement of comprehensive income, and additional information are given below for Supreme Company.

Analysis of selected accounts and transactions:

a. Purchased capital asset, $ 9,000; payment by issuing 600 common shares.

b. Payment at maturity date to retire bonds payable, $ 50,000.

c. Sold the long- term investments for $ 40,000.

d. Reassessment for prior years’ income taxes; paid during 20X5 and added to 20X5 tax expense, $ 6,600.

e. Purchased land, $ 28,400; paid cash.

Required: 

1. Prepare the SCF, using the direct method in the operating activities section. Include a list of non- cash transactions that would be presented in the disclosure notes.

2. Prepare the operating activities section of the SCF using the indirect method in the operating activities section. Omit the separate disclosure of cash flow for interest, investment income, and income tax.

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Statement of Financial Position As at 31 December 20X5 20X4 Debits Cash Accounts receivable $ 40,000 60,000 180,000 2,400 30,000 10,000 250,000 1,600 $574,000 $ 44,900 52,500 141,600 1,200 Merchandise inventory Prepaid interest Investments, long term Land Capital assets Patent (net) 38,400 259,000 1,400 $539,000 Credits Accumulated depreciation Accounts payable Wages payable Income taxes payable Bonds payable $ 79,000 49,700 1,500 13,400 50,000 329,000 16.400 $539,000 $ 65,000 50,000 2,000 9,000 100,000 320,000 28,000 $574,000 Common shares Retained earnings Statement of Comprehensive Income For the year ended 31 December 20X5 Cou 20X5 Sales revenue Cost of goods sold Depreciation expense Patent amortization Salary expense Interest expense Other expenses Investment revenue Gain on sale of investments $399,100 (224,400) (14,000) (200) (80,000) (4,400) (44,000) 900 10,000 (24,600) $ 18,400 Income tax expense Net earnings and comprehensive income