The following selected account balances are taken from the financial statements of Mandrich Inc. at year end prepared using IFRS:

At December 31, 2012, the following information is available:
1. Mandrich Inc. repurchased 2,000 common shares during 2012. The repurchased shares had a weighted average cost of $32,000.
2. During 2012, 1,000 common shares were issued as a stock dividend.
3. Mandrich Inc. chooses to classify dividends paid as financing activities.
Instructions
(a) Calculate net income for the fiscal year ending December 31, 2012.
(b) Provide the necessary disclosure for all of Mandrich Inc.€™s transactions on the statement of cash flows. Also state the section of the cash flow statement in which each item is reported. Where there are choices or options in the classification provide details of the options available.
(c) Does Mandrich Inc. have other choices in classifying dividends paid on the cash flow statement?

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2012 2011 Preferred shares classified as equity Common shares: 9,000 shares in 2012, 10,000 shares in 2011 Contributed surplus reacquisition of common shares Cash dividends preferred Stock dividends common Retained earnings (balance after closing entries) $145,000 122,000 3,500 6,250 14,000 300,000 $145,000 140,000 6,250 4,000 240,000