Luke and Angie Inc.€™s financial statements as at December 31, 2016, appear below:

Supplemental financial information for the year ended December 31, 2016:

• Luke and Angie exchanged 1,500 preferred shares for plant assets having a fair value of $150,000.
• Luke and Angie declared and issued 1,000 ordinary shares as a stock dividend valued at $10,000.
• Goodwill was determined to be impaired and was written down $40,000.
• Luke and Angie paid $10,000 cash and signed a finance lease for $90,000 to acquire plant assets with a fair market value of $100,000.
• Luke and Angie sold equipment (plant assets) with a net book value of $70,000 for $80,000 cash.
• Luke and Angie did not buy or sell any at fair value through profit or loss or at fair value through other comprehensive income securities during the year. The at fair value through profit or loss securities have been designated as cash equivalents.
• Financial asset at amortized cost securities with a book value of $10,000 were called for redemption during the year; $11,000 cash was received.
• The recorded decrease in the bonds payable account was due to the amortization of the premium.
• The deferred income tax liability represents temporary differences relating to the use of capital cost allowance for income tax reporting and straight-line depreciation for financial statement reporting.
• Luke and Angie elects to record interest and dividends paid as an operating activity.

Required:
a. From the information provided, prepare Luke and Angie€™s statement of cash flows for the year ended December 31, 2016, using the indirect method.
b. Prepare note disclosure(s) for non-cash transactions.

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Luke and Angie Inc. Comparative Balance Sheet As at December 31, 2015 and 2016 2016 2015 $ 85,000 $ 102,000 Cash Investments-at fair value through profit or loss 26,000 28,000 Investments-at fair value through other comprehensive 33,000 38,000 income Accounts receivable 52,000 59,000 Inventory 45,000 39,000 Prepaid expenses 12,000 10,000 Investments-financial asset at amortized cost 90,000 100,000 Plant assets 850,000 490,000 Accumulated depreciation (160,000) (110,000) Goodwill 42,000 82,000 $838,000 $1,075,000 $ 48,000 $ 44,000 Accounts payable Accrued liabilities 27,000 30,000 Cash dividends payable 10,000 20,000 Bonds payable 52,000 54,000 Mortgage payable 100,000 Finance lease payable 90,000 Deferred income tax liability 9,000 4,000 Preferred shares 150,000 Ordinary shares 536,000 400,000 Retained earnings 58,000 286,000 (5,000) Reserves $1,075,000 $838,000 Luke and Angie Inc. Statement of Comprehensive Income For the Year Ended December 31, 2016 Sales $860,000 Cost of sales (422,000) Gross profit 438,000 Interest expense (10,000) Depreciation expense (70,000) Operating expenses (180,000) Holding loss on at fair value through profit or loss security (cash equivalent) (2,000) Other gains and losses (29,000) Income before income tax 147,000 Income tax expense (42,000) Net income 105,000 Other comprehensive income: Holding loss on at fair value through other comprehensive income securities (5,000) $100,000 Comprehensive income