Comparative statement of financial position accounts of Laflamme Inc., which follows ASPE, and its statement of income for the year ending December 31, 2014, follow:

The following is additional information about Laflamme's transactions during the year ended December 31, 2014.
1. The cash equivalents are typically term deposits that are very liquid and mature on average in 60 days. The bank overdrafts are temporary and reverse within a few days. Laflamme has opted to show these as cash and cash equivalents on its statement of cash flows.
2. A stock dividend on common shares for $18,000 was declared and distributed during the year.
3. There were no disposals of buildings during the year 2014.
4. Equipment with an original cost of $46,000 and carrying amount of $14,000 was sold at a loss during the year.
5. All depreciation and amortization expense is included in operating expenses.
6. During the year, Laflamme obtained land with a fair value of $100,000 in exchange for its preferred shares.
7. Investment income includes the equity earnings of $62,000 from a long-term investment accounted for using the equity method and from interest revenue on the short-term investments referred to in item 1 above.
Instructions
(a) Prepare the statement of cash flows for the year ended December 31, 2014, for Laflamme Inc. using the indirect method. Prepare any additional disclosure notes that are required, including a table that shows the details of the cash and cash equivalents accounts at the end of each period.
(b) Prepare the operating activities section of the statement using the direct format.
(c) Does Laflamme Inc. have any options available to it concerning the classification of interest and dividends paid or received?
(d) If Laflamme Inc. chose to not treat the cash equivalents and the temporary bank overdrafts as cash and cash equivalents, how would transactions related to these accounts be reported on the statement of cash flows?

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Cash equivalents (Note 1) Long-term investment, at equity (Note 7) Accumulated depreciation buildings Equipment (Note 4) Accumulated depreciation-equipment 4 Common shares $3,164,000 $1,089,000 1 Sales commission expense Operating expenses (Note 5) Sals and wages expense Loss on sale of equipment (Note 4) $195,000