Information from the balance sheet and statement of income are given below for North Road Inc., a company following ASPE, for the year ended December 31.

Additional information:
1. Investments in land were sold at cost during 2011.
2. Equipment costing $56,000 was sold for $15,550, resulting in a gain.
3. Common shares were issued in exchange for some equipment during the year. No other shares were issued.
4. The remaining purchases of equipment were paid for in cash.
Instructions
(a) Prepare a cash flow statement for the year ended December 31, 2011, using the indirect method.
(b) Prepare the operating activities section of the cash flow statement using the direct method.
(c) Does North Road Inc. have a choice in how it classifies dividends paid on the statement of cash flows?

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Comparative Balance Sheet, at December 31 2011 2010 Cash Accounts receivable Inventories Investments in land Property, plant, and equipment Accumulated depreciation 90,800 121,900 84,500 290,000 (49,500) $630,400 92,700 47,250 37,000 102,650 107,000 205,000 (40,000) $458,900 Accounts payable Accrued expenses payable Notes payable Common shares Retained earnings 12,100 140,000 250,000 175,600 $630,400 52,700 48,280 18,830 0,000 200,000 121,790 $458,900 Statement of Income, Year Ended December 31, 2011 Revenues Sales Gain on sale of equipment $297,500 8,750 306,250 Cost of goods sold Depreciation expense Operating expenses Income tax expense Interest expense 99,460 58,700 14,670 39,000 2,940 214,770 91,480 Net income