Luke and Angie Inc.’s financial statements as at December 31, 2021, appear below:

Supplemental financial information for the year ended December 31, 2021: 

■ Luke and Angie exchanged 1,500 preferred shares for plant assets having a fair value of $150,000. 

■ Luke and Angie declared and issued 1,000 ordinary shares as a stock dividend valued at $10,000. 

■ Goodwill was determined to be impaired and was written down $40,000. 

■ Luke and Angie paid $10,000 cash and signed a lease agreement for $90,000 to acquire an ROU asset valued at $100,000. 

■ Luke and Angie sold equipment (plant assets) with a net book value of $70,000 for $80,000 cash. 

■ Luke and Angie did not buy or sell any at fair value through other comprehensive income securities during the year. 

■ Financial asset at amortized cost securities with a book value of $10,000 were called for redemption during the year; $11,000 cash was received. 

■ The recorded decrease in the bonds payable account was due to the amortization of the premium. 

■ The deferred income tax liability represents temporary differences relating to the use of capital cost allowance for income tax reporting and straight-line depreciation for financial statement reporting. 

■ Luke and Angie elects to record interest and dividends paid as an operating activity. 

Required: 

a. From the information provided, prepare Luke and Angie’s statement of cash flows for the year ended December 31, 2021, using the indirect method. 

b. Prepare note disclosure(s) for non-cash transactions.

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Cash Investments-held for meeting short-term cash commitments Investments-at fair value through other comprehensive income Accounts receivable Inventory Prepaid expenses Investments-financial asset at amortized cost Plant assets Accumulated depreciation Goodwill Accounts payable Accrued liabilities Luke and Angie Inc. Comparative Balance Sheet As at December 31 Cash dividends payable Bonds payable Mortgage payable Lease liability Deferred income tax liability Preferred shares Ordinary shares Retained earnings Reserves 2021 $ 85,000 26,000 33,000 52,000 45,000 12,000 90,000 850,000 (160,000) 42,000 $1,075,000 $ 48,000 27,000 10,000 $2,000 100,000 90,000 9,000 150,000 536,000 58,000 (5,000) $1,075,000 2020 $ 102,000 26,000 38,000 59,000 39,000 10,000 100,000 490,000 (110,000) 82,000 $836,000 $ 44,000 30,000 18,000 54,000 4,000 400,000 286,000 $836,000