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Question #2 (20 marks) Comparative statement of financial position accounts of Traduce Inc., (based on IFRS), follow: December 31 Debit accounts 2018 2017 Cash $ 37,000 $ 33,750 AR 67,500 60,000 Inventory 30,000 24,000 Long-term investments 23,250 40,500 Buildings 67,500 56,250 Machinery 30,000 18,750 Land 7,500 7,500 $262,750 $240,750 Credit accounts Allowance for Bad debts (AFBD) $ 2,250 $ 1,500 Acc. Dep- Buildings 13,500 9,000 Acc. Dep - Machinery 5,625 2,250 AP 30,000 24,750 Accrued payables 2,375 1,125 Tax/P 1,000 1,500 Long-term NP (financial) 26,000 31,000 C/S 150,000 125,000 RE 32,000 44,625 $262,750 $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 $640,000 CGS 380,000 GP 260,000 Operating expenses (includes $8,625 Dep. Expense and $5,400 bad debt exp) 180,450 Income from operations 79,550 Unrealized loss on investments $(1,000) Loss of sale of Machinery (800) (1,800) EBT 77,750 Tax expense 40,000 NI $ 37,750 Required: a. Prepare CFS using the INDIRECT method (14 marks) b. Prepare CFO using the DIRECT method (6 marks)