Presented below are the comparative balance sheets and income statement for Wayfarer Inc., a private company reporting under ASPE.

Additional information:
1. Cash dividends of $10,800 were declared on December 30, 2014, payable on January 15, 2012.
2. A long-term debt investment was acquired for cash at a cost of $175,500.
3. Depreciation expense is included in the operating expenses.
4. The company issued 22,500 common shares for cash on March 2, 2014. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment.
5. Equipment that originally cost $45,000 was sold during the year for cash. The equipment had a net book value of $16,200 at the time of sale.
6. The company issued a note payable for $90,000 and repaid $9,000 of it by year end.
Instructions
Prepare a cash flow statement for the year using the indirect method.
TAKING IT FURTHER
If a company earns a profit during the year, does that always mean that there has been a net increase in cash from operating activities? Explain.

WAYFARER INC Balance Sheet December 31 Assets Cash Accounts receivable Inventory Long-term debt investment Property, plant, and equipment 2014 2013 $176,400 135,000 257,400 120,600 181,800 369,000 176,400 1,008,000 (292,500) 828,000 (252,000) $ 1144,800 $1,563,300 Liabilities and Shareholders 117,000 Accounts payable Dividends payable Income tax payable Long-term notes payable Common shares Retained earnings s 157,500 10,800 25,200 81,000 1170,000 118,800 $1,563,300 28,800 945,000 54,000 $1,144,800 WAYFARER INC Income Statement Year Ended December 31, 2014 Sales Cost of goods sold Gross profit $1,137,600 772,200 365,400 $265,500 3,600 Loss on sale of equipment Profit from operations Interest expense Interest revenue Profit before income tax Income tax expense Prosi 269,100 %,300 $ 5,400 (9,900) (4,500) 100,800 25,200 $ 75,600