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Question 2 - Cash Flows Statement The two financial statements below are from NOLA Inc.'s annual report of fiscal year 2012. Additional information: a. During 2012, NOLA Inc. sold old equipment with an original cost of $5,000. b. Trade payables are used only for purchase of merchandise inventory NOLA Inc. Income Statements For the Year Ended December 31, 2012 $ 990,000 (650,000) Sales revenue Cost of sales Gross profit Operating expenses: Depreciation Selling and general Operating income 340,000 $ 15,200 298,800 26,000 (9,600) (1,200) Interest expense Loss on sale of equipment Gain on sale of investments 800 16,000 (4,000) $12,000 Profit before income taxes Income tax expense (@25%) Profit NOLA Inc. Statement of Financial Position as at December 31 2012 2011 Assets Current assets $3,000 $11,400 Cash Trade receivables 13,800 10,600 30,000 Inventories 28,500 Noncurrent assets Equipment Less: accumulated depreciation 68,000 26,000 12,000 24,000 3,000 Investments 2,000 $91,300 $69,000 Total assets Liabilities and Shareholders' Equity Current liabilities $14,000 $8,000 Bank loan Trade payables 11,000 10,600 1,000 1,500 Interest payable Income tax payable Dividend payable 4,000 2,000 600 Noncurrent liabilities Bond payable Shareholders' equity Share capital Retained earnings 8,000 24,000 28,300 52,300 $91,300 $69,000 22,000 25,300 Total shareholders' equity Total liabilities and shareholders' equity 47,300 Required [Show all your calculations]: 1. Prepare in proper form and style a complete Statement of Cash Flows for the year ended December 31, 2012. Use the direct method for the operation activities

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