Ashley Limited, which follows ASPE, had the following information available at the end of 2014:

Note 1: Investment income for the trading investments (FV-NI) includes dividend income of $2,400 and a gain on sale of $4,000 from investments at FV-NI.
Instructions
(a) Prepare a statement of cash flows for Ashley Limited using the direct method, accompanied by all required disclosures and a schedule that reconciles net income to cash flow from operations.
(b) Does Ashley Limited have any options available for the classification of interest and dividends paid or received?
(c) Prepare a memo for top management that summarizes and comments on the cash activities of Ashley in 2014.
(d) Management wants to provide more captions (headings) in the section for cash flow from operating activities.
Recommend one additional caption that would help achieve this goal.

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ASHLEY LIMITED Comparative Statement of Financial Position December 31, 2014, and 2013 2014 2013 $ 25,400 17,500 20,000 42,000 3,000 2,100 1,000 125,000 350,000 (105,000) 525,000 (130,000) 90,000 (45,000) $921,000 Cash Accounts receivable FV-NI investments 16,950 30,000 35,000 12,000 900 750 175,000 350,000 (87,500) 400,000 (112,000) 90,000 (40,000) $871,100 rent Prepaid insurance Office supplies Land Buildings Accumulated depreciation Buildings Equipment Accumulated depreciation- Equi Patents Accumulated amortization -Patents Total assets Temporary bank overdraft Accounts payable Income tax payable Salaries and wages payable Short-term notes payable (trade) Long-term notes payable (non-trade) Deferred tax liability Bonds payable Common shares Retained earnings 22,000 5,000 5,000 10,000 60,000 30,000 375,000 260,000 154,000 $12,000 20,000 4,000 3,000 10,000 70,000 25,000 375,000 237,500 114,600 $871,100 Total liabilities and shareholders equity $921,000 ASHLEY LIMITED Income Statement Year Ended December 31, 2014 Sales revenue Cost of goods sold Gross margin Operating expenses $1,160,000 748,000) 412,000 Selling expenses Administrative expenses Salaries and wages expense Depreciation and amortization expense Total operating expenses $19,200 124,700 92,000 40,500 276,400) 135,600 Income from operations Other revenues/expenses Gain on sale of land Investment income (Note 1) Interest expense 8,000 6,400 (51,750) Income before taxes Income tax expense Net income (37,350) 98,250 (39,400) $ 58,850