Question 3 (25 marks) Envol was formed on January 1, 2016, when tossed common shares for $500,000. Tarly in January 2016, Envoi made the following cash payments: # $250,000 for equipment b. 5200,000 for inventory (tour cars at $50,000 each) c. $10,000 for 2016 rent on a store building In February 2016, Envoi purchased six cars for inventory on account, Cost of this story was $260,000 (543,333.33 each). Before year end, Erwo pod S208,000 of this debit. Ervases the FIFO method to account for inventory During 2016, Envoi sold eight vintage autos for a total of 5600,000. Before year endret collected of this amount The business employs three people. The combined annual payroll is 555,000, of which not owes $4,000 at year end. At the end of the year, Envoi paid income tax of $10,000 Late in 2016, Envoi declared and paid cash dividends of $11,000 For equipment, Envoi uses the straight line depreciation method over five years with rero residual value Requirements 1. Prepare Envoi's income statement for the year ended December 31, 2016. Use the single step format, with all revenues listed together and all expenses listed together Prepare Envoi's balance sheet at December 31, 2016, Prepare Envoi's statement of cash flows for the year ended December 31, 2016. Format cash flows from operating activities by using the indirect method Comment on the business performance based on the statement of cash flows