Sable Island Ltd. is a private company reporting under ASPE. Its income statement contained the following condensed information:

Sable Island's balance sheet contained the following comparative data at December 31:

Additional information: Accounts payable relate to operating expenses.
Instructions
Prepare the operating activities section of the cash flow statement using (a) the indirect method or (b) the direct method, as assigned by your instructor.
TAKING IT FURTHER
What are the advantages and disadvantages of the indirect method of determining cash provided (used) by operating activities?

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SABLE ISLAND LTD Income Statement Year Ended December 31, 2014 Fees earned Operating expenses Depreciation expense Gain on sale of equipment Profit from operations Other expenses $900,000 $642,000 50,000 (23,000) 669,000 231,000 Interest expense Profit before income tax Income tax expense Prosi 5,000 226,000 56,500 $169,500 2013 $56,000 11,500 36,000 9,250 2014 Accounts receivable Prepaid expenses Accounts payable Income tax payable Interest payable Unearned revenue $48,000 14,000 41,000 4,000 1,000 13,750 550 10,000