The following selected account balances were taken from the financial statements of Blumberg Inc. concerning its long-term investment in shares of Black Inc. over which it has had significant influence since 2009:

At December 31, 2012, the following information is available:
1. Blumberg purchased additional common shares in Black Inc. on January 2, 2012, for $65,000. As a result of this purchase, Blumberg€™s ownership interest in Black increased to 40%.
2. Black reported income of $33,000 for the year ended December 31, 2012.
3. Black declared and paid total dividends of $14,000 on its common shares for the year ended December 31, 2012.
Instructions
(a) Prepare a reconciliation of the Investment in Black Inc. account from December 31, 2011, to December 31, 2012, assuming Blumberg Inc. uses the equity method for this investment.
(b) Prepare a table that contrasts the direct and indirect methods for presenting all transactions related to the Black Inc. investment on Blumberg€™s statement of cash flows based on the assumption that Black uses IFRS and adopts the policy of classifying dividends received as investing activities. Be specific about the classification in the statement for each item that is reported.
(c) Prepare a table that contrasts the direct and indirect methods for presenting all transactions related to the Black Inc. investment on Blumberg€™s statement of cash flows based on the assumption that Black uses ASPE and must therefore classify dividends received as operating cash flows.

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Dec. 31, 2012 $494,600 Dec. 31, 2011 $422,000 Investment in Black Inc. Investment income recorded for Black 13,200 11,800