The financial statements of Wetaskiwin Limited are presented here:

Additional information:
1. Recorded an unrealized loss of $9,000 on trading investments.
2. Equipment was sold during the year for $8,000 cash. This equipment originally cost $15,000 and had a carrying amount of $10,000 at the time of sale.
3. Equipment costing $10,000 was purchased in exchange for $5,000 cash and a bank loan for the balance.
4. Accounts payable relate to merchandise creditors.
5. Operating expenses are composed of $11,000 of depreciation expense, $12,000 of administrative expenses, $49,000 of salaries expense, and a $2,000 loss on the sale of equipment.
Instructions
(a) Prepare the statement of cash flows, using either (1) the indirect method or (2) the direct method, as assigned by your instructor.
(b) Wetaskiwin's cash position declined by $1,000 between 2011 and 2012. Identify the reason(s) for this decrease.

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WETASKIWIN LIMITED Statement of Financial Position December 31 2012 2011 Assets Cash Trading investments Accounts receivable Merchandise inventory $ 9,000 14,000 28,000 29,000 10,000 23,000 14,000 25,000 Property, plant, and equipment 73,000 (30,000) $123 78,000 (24,000) Total assets $126,000 Liabilities and Shareholders' Equi Accounts payable Income tax payable Bank loan payable Common shares Retained earnings Accumulated other comprehensive loss Total liabilities and shareholders' equity 32,000 2,000 15,000 25,000 64,000 (15,000) 58,000 10,000 20,000 25,000 28,000 (15,000) $123,000 $126,000 WETASKIWIN LIMITED Income Statement Year Ended December 31, 2012 Cost of goods sold Gross profit Operating expenses Profit from operations $286,000 154,000 132,000 74,000 58,000 ther expenses and losses Unrealized loss on trading investments $9,000 3,000 Interest expense Profit before income tax Income tax expense Profit 12,000 46,000 10,000 36,000