Comparative statement of financial position accounts of Jensen Limited, which follows IFRS, appear below:

Data from Jensen's 2017 income statement follow:

Additional information:
1. Equipment that cost $10,000 and was 40% depreciated was sold in 2017.
2. Cash dividends were declared and paid during the year.
3. Common shares were issued in exchange for land. No other land was acquired or disposed of during the year. Common shares were also issued for equipment purchases in the amount of $20,000.
4. FV-NI investments that had cost $35,000 and had a fair value of $37,000 at December 31, 2016 were sold during the year for proceeds of $50,000 resulting in a realized gain of $13,000. Jensen also had unrealized gains during the year of $11,000. Additional purchases of FV-NI investments were made during 2017.
5. Cost of goods sold includes $115,000 of direct labour and benefits and $11,700 of pension costs. Operating expenses include $76,000 of salaries and wages and $8,000 of pension expense.
6. Jensen has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities on the statement of cash flows.
7. No accounts receivable were written off during the year.
Instructions
(a) Prepare a statement of cash flows using the indirect method, including all required disclosures.
(b) Prepare the "Cash provided by (or used in) operating activities" section under the direct method.
(c) Does Jensen Limited have any options available for the classification of interest and dividends paid or received?
(d) Comment on the company's cash activities during the year.
(e) Assume that you are a shareholder of Jensen Limited. What do you think of the dividend payout ratio that is high- lighted in the statement of cash flows?

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JENSEN LIMITED Statement of Financial Position Accounts December 31, 2017 and 2016 Debit balances Cash FV-NI investments Accounts receivable Inventory Deferred tax asset Equipment Buildings Land 2017 2016 $ 80,000 59,000 138,500 75,000 6,500 70,000 145,000 40,000 $614,000 $51,000 80,000 119,000 61,000 11,000 48,000 145,000 25,000 $540,000 Credit balances Allowance for doubtful accounts Accumulated depreciation-equipment Accumulated depreciation-buildings Accounts payable Income tax payable Long-term notes payable Accrued pension liability Common shares Retained earnings 2017 2016 10,000 21,000 37,000 72,500 12,000 62,000 7,500 300,000 92,000 $614,000 $ 8,000 14,000 28,000 60,000 10,000 70,000 10,000 250,000 90,000 $540,000 Sales Less: Cost of goods sold Gross profit Less: Operating expenses (includes $960,000 600,000 360,000 250,000 110,000 depreciation and bad debt expense) Income from operations Other revenues and expenses Interest expense Gain on FV-NI investments Loss on sale of equipment $(10,000) 24,000 (3,000) Income before tax Income tax Net income 11,000 121,000 45,000 $76,000