Laflamme Inc. follows IFRS and has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. Comparative statement of financial position accounts of Laflamme Inc., and its statement of income for the year ending December 31, 2017, follow:

The following is additional information about Laflamme's transactions during the year ended December 31, 2017.
1. The cash equivalents are typically term deposits that are very liquid and mature on average in 60 days. The bank overdrafts are temporary and reverse within a few days. Laflamme has opted to show these as cash and cash equivalents on its statement of cash flows.
2. During the year, preferred shares with a carrying amount of $18,000 were converted to common shares.
3. There were no disposals of buildings during the year 2017.
4. Equipment with an original cost of $46,000 and carrying amount of $14,000 was sold at a loss during the year.
5. All depreciation and amortization expense is included in operating expenses.
6. During the year, Laflamme obtained land with a fair value of $100,000 in exchange for its preferred shares.
7. Investment income includes the equity earnings of $62,000 from a long-term investment accounted for using the equity method and from interest revenue on the short-term investments referred to in item 1 above.
Instructions
(a) Prepare the statement of cash flows for the year ended December 31, 2017 for Laflamme Inc. using the indirect method. Prepare any additional disclosure notes that are required, including a table that shows the details of the cash and cash equivalents accounts at the end of each period.
(b) Prepare the operating activities section of the statement using the direct format.
(c) Does Laflamme Inc. have any options available to it concerning the classification of interest and dividends paid or received?
(d) If Laflamme Inc. chose to not treat the cash equivalents and the temporary bank overdrafts as cash and cash equivalents, how would transactions related to these accounts be reported on the statement of cash flows?

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December 31 2017 2016 $ 46,000 36,000 348,000 16,000 398,000 13,000 418,000 640,000 1,310,000 56,000 45,000 271,000 35,000 350,000 17,000 400,000 500,000 1,280,000 $ (10,000) (9,000) Cash Cash equivalents (Note 1) Accounts receivable Prepaid insurance Inventory 77,000 (19,000) 48,000 (4,000) 18,000 140,000 30,000 Long-term investment, at equity (Note 7) Land (Note 6) Buildings (Note 3) (400,000) 632,000 (160,000) 100,000 (40,000) $3,357,000 (360,000) 640,000 (135,000) 100,000 (35,000) $3,164,000 Accumulated depreciation-buildings Equipment (Note 4) Accumulated depreciation-equipment (40,000) (8,000) (25,000) Accumulated amortization (5,000) $193.000 Bank overdrafts (temporary) Accounts payable Income tax payable Accrued liabilities Dividends payable Long-term notes payable Bonds payable Preferred shares Common shares Retained earnings 165,000 26,000 57,000 20,000 420,000 999,000 486,000 746,000 438,000 $3,357,000 $(93,000) 15,000 (9,000) 16,000 (30,000) (40,000) 150,000 35,000 50,000 460,000 995,000 380,000 666,000 294,000 $3,164,000 106,000 80,000 144,000 $193,000 Income Statement Revenues Sales revenue Investment income $ 999,000 90,000 $1,089,000 Expenses and Losses Cost of goods sold Sales commission expense Operating expenses (Note 5) Salaries and wages expense Interest expense Loss on sale of equipment (Note 4) Income tax expense 108,000 166,000 104,000 95,000 96,000 894,000 $195,000 Net Income