The 2014 comparative balance sheet and 2014 income statement of Byfield Co Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information. You are next required to address the requirements outline below. Identify the purposes of the statement of cash flows Identify the distinguishing features of operating, investing, and financing cash flows Prepare the statement of cash flows by the indirect method. Identify noncash investing and financing activities       Simple Things Industries Ltd.   Comparative Balance Sheet   December 31, 2014 and 2013     2014 2013 Increase/(Decrease)           Assets            Cash      175,000            15,000  ?      Accounts Receivable      230,000         220,000  ?      Inventories      310,000         340,000  ?      Prepaid expenses        30,000            10,000  ?      Intangible assets      105,000         105,000  ?   Equipment, net      860,000         830,000  ?   Total Assets  1,710,000      1,520,000           Liabilities            Accounts payable        90,000         140,000  ?      Accrued liabilities      190,000         160,000  ?      Income tax payable      120,000         140,000  ?   Long-term notes payable      360,000         450,000  ?         Stockholders' Equity         Common Stock      400,000         250,000  ?   Retained earnings      640,000         400,000  ?   Treasury stock      (90,000)          (20,000)  ?   Total liabilities and stockholders' equity  1,710,000      1,520,000               Simple Things Industries Ltd     Income Statement     Year Ended December 31,2014     Revenues and gains:            Sales revenue  1,900,000          Gain on sale of equipment        20,000             Total revenues and gains        1,920,000     Expenses            Cost of goods sold      850,000          Depreciation expense      190,000          Other operating expense      360,000             Total expenses        1,400,000     Income before income taxes           520,000     Income tax expense           180,000     Net Income           340,000   Notes       Acquisition of plant asset during 2014           320,000   Sale proceed from sale of equipment           120,000   Receipt for issuance of notes payable              10,000   Payment for note payable           100,000   Dividend paid           100,000   Book value of equipment sold           100,000