Grand Corp.’s 20X2 financial statements showed the following:

Additional information:

During the year, equipment with an original cost of $82,000 was sold for cash.

Required:

1. Prepare the SCF, in good form. Include required note disclosure of non-cash transactions. Omit the separate disclosure of cash flow for interest, investment income, and income tax. Make logical assumptions regarding the nature of change in asset, liability, and equity accounts.

2. Explain the company’s cash transactions for the year, based on the SCF.

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Sales $421,050 Cost of goods sold $ 160,000 Depreciation 21,000 Other operating expenses 62,950 Income tax 36,200 Loss on sale of equipment 2,550 Gain on sale of investment (1.600) 281,100 Net earnings and comprehensive income $139.950 As at December 31 20X2 20X1 Cash $ 56,900 $ 45,300 Accounts receivable 73,500 84,600 Inventory 154,000 144,500 Equipment 456,500 391,500 Less: accumulated depreciation (189,500) (188,500) Investment 45,000 65.000 $596,400 $542.400 $ 85,600 Total Accounts payable $ 50,900 Income tax payable 8,150 5,800 Bonds payable 37,500 Common shares 252,000 252,000 Retained earnings 247,850 199,000 Total $596,400 $542,400