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The comparative statements of financial position for Gold Inc. appear below: 2017 2016 Assets Cash $ 10,000 $ 18,000 Accounts receivable 15,000 31,000 Inventory 13,000 22,000 Land 30,000 0 Equipment, net 43,000 13,000 Total assets $111,000 $ 84,000 Liabilities and Shareholder's Equity Trade payables $ 14,000 $ 31,000 Long-term notes payable 40,000 15,000 Common shares 11,000 11,000 Retained earnings 46,000 27,000 Total liabilities and shareholder's equity $111,000 $ 84,000 Additional information: 1. Profit for the year ending December 31, 2017 was $28,000. Included in the determination of profit was a gain of $2,000 on the sale of equipment (see note 3 below) and depreciation expense of $8,000. 2. The carrying amount of the equipment at the end of 2017 and 2016 was determined as follows: 2017 2016 Equipment 55,000 27,000 Accumulated depreciation: Equipment (12,000) (14,000) Net carrying amount $ 43,000 $ 13,000 3. Equipment with a cost of $20,000 and accumulated depreciation of $10,000 was sold for cash proceeds of $12,000 during 2017. 4. Equipment costing $10,000 was purchased during the year in exchange for a note payable instead of cash. All other equipment purchases were for cash. There were no other non-cash transactions during the year.RE! gned in as, los eh BA RO N 10 000 SELECT A GAM Proceeds from sale of equipment = OT Beginning valuet (gain ) 15000 10000 21000 14000 = 18000 6000 E N Required: Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method. Solution Gold Inc. Statement of Cash Flows for the year ended December 31, 2017 1mark Operating Activities Profit $ 28,000 1 marl Adjustments to reconcile net profit to cash from operations Gain on sale of equipment (2,000) 1 mark Depreciation expense 8,000 1 mark Decrease in accounts receivable 16,000 1 mark Decrease in inventories 9,000 1 mark Decrease in trade payables (17,000) 1 mark 14,000 Cash from operations 42,000 1 mark Investing Activities Sale of equipment for cash 12,000 1 mark Purchase of equipment less portion paid for by note 55,000 ending -(27000 beginning - 20,000 cost of equipment sold)-10,000 note (38,000) 2 marks Purchase of land (30,000) 1 mark (56,000)