Ashley Limited, which follows IFRS, chooses to classify interest and dividends received as well as interest paid as operating activities and dividends paid as financing activities. Ashley had the following information available at the end of 2017:

Instructions
(a) Prepare a statement of cash flows for Ashley Limited using the direct method, accompanied by a schedule that provides cash flow from operations using the indirect approach.
(b) Does Ashley Limited have any options available for the classification of interest and dividends paid or received?
(c) Prepare a memo for top management that summarizes and comments on Ashley's cash activities in 2017.

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ASHLEY LIMITED Comparative Statement of Financial Position December 31, 2017 and 2016 2017 Cash Accounts receivable FV-NI investments Inventory Prepaid rent Prepaid insurance Office supplies $25,400 13,500 20,000 42,000 7,000 16,950 30,000 35,000 12,000 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patents Accumulated amortization-patents 125,000 350,000 (105,000) 525,000 (130,000) 750 175,000 350,000 (87,500) 400,000 (112,000) 90,000 (40,000) $871,100 (45,000) $921,000 Total assets Temporary bank overdraft Accounts payable Income tax payable Salaries and wages payable Short-term notes payable (trade) Long-term notes payable (non-trade) Deferred tax liability Bonds payable Common shares Retained earnings $ 12,000 20,000 22,000 5,000 5,000 10,000 60,000 30,000 375,000 260,000 154,000 $921,000 1,000 10,000 70,000 25,000 375,000 237,500 114,600 871,100 Total liabilities and shareholders' equity ASHLEY LIMITED Income Statement Year Ended December 31, 2017 Sales revenue $1,160,000 (748,000) 412,000 Cost of goods sold Operating expenses Selling expenses Administrative expenses Salaries and wages expense Depreciation and amortization expense Total operating expenses s 39,200 124,700 92,000 40,500 (296,400) 115,600 Income from operations Other revenues/expenses Gain on sale of land Investment income (Note 1) Interest expense 8,000 (41,750) (27,350) 88,250 Income before taxes Income tax expense Net income $58,850 Note 1: Investment income generated by (FV-NI) investments includes dividend income of $2,400 and a gain on sale of investments of $4,000.