The financial statements  for Fardy Limited are shown below:

During the year, the company purchased a capital asset valued at $ 10,000; payment was made by issuing common shares. Additional capital assets were acquired for cash. Changes in other accounts were typical transactions.

Required:
1. Prepare the SCF using the indirect method. Include required note disclosure of non- cash transactions. Omit the separate disclosure of cash flow for interest, investment income, and income tax.
2. Explain the company's cash transactions for the year, based on the SCF.

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Statement of Comprehensive Income For the year ended 31 December 20X5 Sales revenue Investment revenue Operating expenses, including cost of goods sold Depreciation expense Goodwill impairment Administrative expenses Interest expense Gain on sale of investment Income tax expense Net earnings and comprehensive income $607,100 12,500 264,400 35,000 38,700 207,000 15,100 2,000 24,600 $36,800 Statement of Financial Position As of 31 December 20X5 20X4 Assets Cash Accounts receivable Merchandise inventory Prepaid insurance Investments Land Capital assets, net of accumulated depreciation Goodwill, net of impairment $ 27,500 30,000 70,000 210,000 6,400 40,000 90,000 310,000 96,600 $1,014900 $853,000 102,500 231,400 2,600 25,000 90,000 478,000 57,900 Liabilities and equity Accounts payable Rent payable Income tax payable Bonds payable Pension obligation Common shares Retained earnings $ 212,400 7,500 16,400 370,000 16,700 324,000 67,900 $1,014,900 $189,000 5,000 16,000 300,000 10,000 270,000 63,000 $853,000