Financial statements for Nackawic Inc. follow:

NACKAWIC INC.

Statement of Financial Position

December 31

NACKAWIC INC.
Income Statement
Year Ended December 31, 2015

Additional information:
1. Recorded an unrealized loss of $9,000 on trading investments.
2. Equipment was sold during the year for $8,000 cash. This equipment originally cost $15,000 and had a carrying amount of $10,000 at the time of sale.
3. Equipment costing $10,000 was purchased in exchange for $5,000 cash and a bank loan for the balance.
4. Accounts payable relate to merchandise creditors.
5. Operating expenses are composed of $11,000 of depreciation expense, $12,000 of administrative expenses, $49,000 of salaries expense, and a $2,000 loss on the disposal of equipment.
Instructions
(a) Prepare the statement of cash flows, using either (1) the indirect method or (2) the direct method, as assigned by your instructor.
(b) Wetaskiwin's cash position declined by $1,000 between 2014 and 2015. Identify the reason(s) for this decrease?

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2015 2014 Assets Cash Accounts receivable Long-term investments Property, plant, and equipment Accumulated depreciation Total assets 82,700 80,800 131,900 94,500 290,000 $47,250 37,000 102,650 107,000 205,000 (40,000) $458,900 $630,400 Liabilities and Shareholders' Equit Accounts payable Accrued liabilities Bank loan payable Common shares Retained earnings Total liabilities and shareholders equity 62,700 12,100 140,000 240,000 175,600 $630,400 48,280 18,830 70,000 200,000 121,790 $458,900 Sales Cost of goods sold Gross profit Operating expenses Profit from operations Other revenues and expenses $286,000 154,000 132,000 74,000 58,000 Unrealized loss on trading investments $9,000 3,000 Interest expense Profit before income t Income tax expense Profit 12,000 46,000 10,000 S 36,000 ax