Strong House Inc. had the following condensed statement of financial position at the end of operations for 2013:

Strong House Inc. follows IFRS and chooses to classify dividends paid as financing activities and interest paid as operating activities on the statement of cash flows.
During 2014, the following occurred:
1. Strong House Inc. sold part of its investment portfolio in bonds for $15,500, resulting in a gain of $500.
2. Dividends totalling $19,000 were paid to shareholders.
3. A parcel of land was purchased for $5,500.
4. Common shares with a fair value of $20,000 were issued.
5. Bonds payable of $10,000 were retired at par.
6. Heavy equipment was purchased through the issuance of $32,000 of bonds.
7. Net income for 2014 was $42,000 after allowing for depreciation on Strong House's plant assets of $13,550. The amount of interest paid during 2014 was $4,150 and the amount of income taxes paid was $19,500.
8. Both current assets (other than cash) and current liabilities remained at the same amount.
Instructions
(a) Prepare a statement of cash flows for 2014 using the indirect method.
(b) Draft a one-page letter to Mr. Gerald Brauer, president of Strong House Inc., in which you briefly explain the changes within each major cash flow category. Refer to the statement of cash flows whenever necessary.
(c) Prepare a statement of financial position at December 31, 2014, for Strong House Inc.
(d) Comment briefly about why the statement of cash flows used to be called a statement of changes in financial position.

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STRONG HOUSE INC. Statement of Financial Position For the Year Ended December 31, 2013 Cash Current assets (non-cash) Investment in bonds, at amortized cost Plant assets Land 10,000 C liabilities 4,000 Long-term notes payable 40,000 Bds payable 57,500 Share capital 38,500 Retained earnings $14,500 30,000 32,000 80,000 23,500 $180,000 $180,000