The income statement and unclassified statement of financial position for E-Perform, Inc. follow:

Additional information:
1. Prepaid expenses and accrued liabilities relate to operating expenses.
2. An unrealized gain on held for trading investments of $14,000 was recorded.
3. New equipment costing $85,000 was purchased for $25,000 cash and a $60,000 long-term bank loan payable.
4. Old equipment having an original cost of $57,500 was sold for $1,500.
5. Accounts payable relate to merchandise creditors.
6. Some of the bank loan was repaid during the year.
7. A dividend was paid during the year.
8. Operating expenses include $46,500 of depreciation expense and a $7,500 loss on disposal of equipment.
Instructions
(a) Prepare the statement of cash flows, using the indirect method.
(b) E-Perform's cash position more than doubled between 2017 and 2018. Identify the primary reason(s) for this significant increase.

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E-PERFORM, INC. Statement of Financial Position December 31 2018 2017 Assets Cash Held for trading investments Accounts receivable Inventories Prepaid expenses Equipment Accumulated depreciation Total assets $97,800 $48,400 128,000114,0o0 75,80043,00o 122,50092,850 18,400 26,000 270,000 242,500 (50,000) (52,000) $662,500 $514,750 ia Accounts payable Accrued liabilities Bank loan payable Common shares Retained earnings 1o $93,000 $ 77,300 7,000 110,000 150,000 200,000175,000 248,000 105,450 Total liabilities and shareholders' equity $662,500 $514,750 11,500 E-PERFORM, INC. Income Statement Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses Income from operations Other revenues and expenses Unrealized gain on held for trading investments $14,000 Interest expense Income before income tax Income tax expense Net income $492,780 185,460 307,320 116,410 190,910 (4,7309,270 200,180 45,000 $155,180