Comparative statement of financial position accounts of Secada Inc., which follows IFRS, follows:

Additional information:
1. Cash dividends declared during the year were $25,375.
2. A 20% stock dividend was declared during the year and $25,000 of retained earnings was capitalized.
3. Investments at FV-NI that cost $20,000 and had a fair value at December 31, 2013, of $24,750 were sold during the year for $23,750.
4. Machinery that cost $3,750 and had $750 of depreciation accumulated was sold for $2,200.
Secada's 2014 statement of income is as follows:
Sales revenue........................................................$640,000
Less cost of goods sold.............................................380,000
Gross margin.........................................................260,000
Less: Operating expenses (includes $8,625
depreciation and $5,400 bad debts) ...........................180,450
Income from operations.............................................79,550
Unrealized loss on FV-NI investments.........$ (1,000)
Loss on sale of machinery............................(800).........(1,800)
Income before tax....................................................77,750
Income tax expense..................................................40,000
Net income..........................................................$37,750
Instructions
(a) Calculate net cash flow from operating activities using the direct method.
(b) Prepare a statement of cash flows using the indirect method.
(c) Assume that your investment club is considering investing in Secada Inc. Write a memo to the other members of the club about the company's cash activities during 2014.
(d) Management wants to provide more captions (headings) in the section on cash flow from operating activities.
Recommend one additional caption that would help achieve that goal.

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SECADA INC. Comparative Statement of Financial Position Accounts December 31, 2014, and 2013 December 31 Debit account 2014 2013 Cash Accounts receivable Merchandise inventory Long-term investments (FV-NI) Machiner Buildings Land $37,000 67,500 30,000 23,250 30,000 67,500 7,500 $262,750 33,750 60,000 24,000 40,500 18,750 56,250 7,500 $240,750 Credit accounts Allowance for doubtful accounts Accumulated depreciation-machinery Accumulated depreciation buildings Accounts payable Accrued payables Income taxes payable Long-term note payable-non-trade Common shares Retained earnings $2,250 5,625 13,500 30,000 2,375 1,000 26,000 150,000 32,000 $262,750 $1,500 2,250 9,000 24,750 1,125 1,500 31,000 125,000 44,625 $240,750