Quicklaw Inc. began operations on January 1, 2013. Its post-closing trial balance at December 31, 2013 and 2014 is shown below along with some other information.

Other information regarding Quicklaw Inc. and its activities during 2014:
1. Assume all accounts have normal balances.
2. Cash dividends were declared and paid during the year.
3. There were no sales of property, plant and equipment assets during the year.
4. Long-term investments were sold for cash at their original cost.
Required Using the information provided, prepare a statement of cash flows (applying the indirect method) for the year ended December 31, 2014.
Analysis Component:
a.Quicklaw Inc. experienced an increase in cash during 2014. Does this necessarily represent a favourable situation? Explain why or why not.
b. Explain the causes of change in Quicklaw’s cash situation during2014.

Quicklaw Inc. Post-Closing Trial Balance (000s) Quicklaw Inc. Income Statement For Year Ended December 31, 2014 (000s) December 31 2014 Account Cash . Receivables 2013 Revenues: $2,880 2,800 2,560 $1,840 Sales. $3,784 2,080 Expenses: Cost of goods sold.. Other expenses.. Income tax expense.. Depreciation expense Total expenses. Merchandise inventory. Property, plant and equipment. Accumulated depreciation.. 3,040 $1,536 3,040 2,720 880 1,920 1,840 288 2,240 Long-term investments Accounts payable. Accrued liabilities 2,080 80 1,920 1,440 2,784 $1,000 320 480 Net income... Bonds payable. 2,240 2,400 Common shares.. 3,040 2,720 Retained earnings. 3,920 3,040