Required: Prepare Alrich Farms statement of cash flows for fiscal 2015 using the indirect method.

Page 4 9B17B008 EXHIBIT 1: ALRICH FARMS STATEMENT OF EARNINGS YEAR ENDED DECEMBER 31, 2015 (IN CANADIAN DOLLARS) REVENUE Crop revenue Livestock revenue $198,465 26,278 224,743 Variable crop costs Variable livestock costs 125,665 Contribution 91,107 FIXED COSTS 5,488 15,911 3,208 3,330 46,924 (3,944) 18,507 35,000 8,687 Fuel-machinery & vehicle Maintenance-machinery & vehicle Insurance-machinery & vehicle Equipment repairs Loss on sale of equipment Gain on trade-in of machinery Depreciation-fixed assets Salaries Interest General & administration Totai fixed costs 144 133 Net income before taxes (53,026) Income taxes Net income after taxes 53026 Note: Fixed assets were depreciated using the straight-line method; n fiscal 2014Alrich Farms's net income was $3,042 on gross revenues of $224,560 Source: Company files. EXHIBIT 2: ALRICH FARMS STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31 (IN CANADIAN DOLLARS) ASSETS Current assets 2015 2014 Cash $ (58,620) $ (47,430) 4,487 11,585 (31,358) 6,477 14,52 (37,614) Total current assets Fixed assets: Land Land improvements, drainage Less: Accumulated depreciation Machinery & vehicle $ 478,000 68,157 141,568 (50,195)_47.063 (39,938)86,775 $ 478,000 $100,317 $ 100,317 -132160) 198,518 (61.180 147,268 (56,950) 126,713 361801 64,137 208,448 Equipment Less: Accumulated depreciation 97,258 Total fixed assets Total assets LIABILITIES& SHAREHOLDERS' EQUITY Current liabilities 736,468 774,500 $743,142 $ 2,454 3,500 6,750 12,704 $ 4,454 3,500 6,750 14,704 Accounts payable Current portionFarm Credit Canada Current portionT&E Total current liabilities Bank loan payable 27,352 4,775 1,589 99,457 48,750 50,000 204,571 Mortgage payable-Farm Credit Canada Mortgage payable-R&E Promissory note-T&E 95,957 42,000 50,000 215,309 Total long-term liabilities Total liabilities 228,013 219,275 Sharehoiders' equity Common stock Retained earnings Total shareholders' equity 100 470,741 470,841 100 767 523,867 Total liabilities and shareholders' equity S 698 854 $743.142 Notes: The Alrich farm had a $85,000 overdraft limit at the bank: T&E was an arm's-length financial institution of the local municipal township: R&E was a loan from the previous generation of the Alrich family Source: Company files