Squash Forever Corp.’s first year of operations was 2018. Its transactions for the year are as follows:

1. Sold ordinary shares for $50,000 cash and preferred shares for $20,000 cash.
2. Paid $20,000 to acquire at fair value through other comprehensive income securities.
3. Net income for the year was $29,000 after recording $10,000 in depreciation expense on the plant and equipment.
4. Purchased $200,000 inventory on account.
5. Recorded $300,000 in sales on account; cost of goods sold was $140,000.
6. Received $190,000 from customers previously sold to on account.
7. Paid $40,000 cash to a supplier in partial settlement of the inventory purchased in transaction #4.
8. Paid $20,000 cash to redeem ordinary shares redeemed at book value.
9. Received $23,000 cash from the sale of at fair value through other comprehensive income investments purchased in transaction #2.
10. Acquired equipment with a fair market value of $80,000 by way of a finance lease.
11. Declared and paid dividends totalling $20,000. Squash has a policy of reporting dividends as a cash outflow from financing activities.
12. Made a $15,000 payment on the finance lease including $4,000 in interest. Squash has a policy of reporting interest paid as a cash outflow from operating activities.
13. Paid $100,000 cash for various administrative expenses.
14. Paid $20,000 cash in income taxes; cash paid equals income tax expense.

Required:
a. Prepare a statement of cash flows for 2018 using the indirect method.
b. Prepare an income statement for the year ended December 31, 2018.
c. Prepare a balance sheet as at December 31, 2018.
d. Discuss how the transaction(s) above that are not reported on the statement of cash flows are reported in the financial statements.
e. Squash’s policy is to report interest paid as a cash outflow from operating activities and dividends paid as a cash outflow from financing activity. What are its alternatives in this respect? How would the statement of cash flows that you prepared in (a) differ if Squash had adopted a policy of reporting the receipt and payment of interest and dividends as operating activities?