Liz Hicks Accounting Ltd.’s (LHA) policy is to report all cash flows arising from interest and dividends in the operating section. LHA owns a 30% interest in an associated company, LH Bookkeeping Inc. (LHB), and accounts for this investment using the equity method. LHA’s activities for the year ended December 31, 2019, included the following:

• Net income totalled $625,000, including $60,000 in investment income arising from its investment in LHB.
• Received $20,000 in dividends from LHB that were declared in 2018.
• Declared a cash dividend of $40,000 that was payable on January 5, 2020.
• Interest expense for the year was $28,000; the opening and closing balances in the interest payable account were $17,000 and $21,000, respectively.
• Total income tax expense for the year was $65,000; the current taxes payable account increased $3,000 and the deferred taxes liability increased $5,000.
• Accounts receivable decreased $16,000 and accounts payable decreased $14,000 during the year.
• LHA sold equipment for $15,000 cash that had a net book value of $14,000.
• Depreciation expense for the year totalled $62,000.
• LHB leased equipment having a fair market value of $39,000. The company made one payment of $4,500 during the year; $2,900 was allocated to interest expense with the remaining $1,600 reducing the finance lease liability.

Required:
a. Prepare the cash flows from operating activities section of the statement of cash flows for LHA using the indirect method.
b. Identify how the activities detailed above that are not operating activities would be reported in the statement of cash flows.