Tuit Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2020: 

Additional information: 

1. Dividends on common shares in the amount of $6,000 were declared and paid during 2020. 

2. Depreciation expense is included in operating expenses, as is salaries and wages expense of $69,000. 

3. Equipment with a cost of $20,000 that was 70% depreciated was sold during 2020. 

Instructions 

a. Prepare a statement of cash flows using the direct method. 

b. Prepare a statement of cash flows using the indirect method. 

c. Does Tuit Inc. have any options on how to classify interest and dividends paid on the statement of cash flows? 

d. From the perspective of an investor who is interested in investing in mature, successful companies, comment on Tuit Inc.'s sources and uses of cash by analyzing the company's statement of cash flows.

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Tuit Inc. Comparative Statement of Financial Position December 31 2020 2019 Cash $ 53,625 $ 25,000 Accounts receivable 58,000 51,000 Inventory 40,000 60,000 Prepaid rent 5,000 4,000 Equipment Accumulated depreciation-equipment 154,000 130,000 (35,000) (25,000) Goodwill 20,000 50,000 Total assets $295,625 $295,000 $ 46,000 $ 40,000 Accounts payable Income tax payable Salaries and wages payable Short-term loans payable 4,000 6,000 8,000 4,000 8,000 10,000 Long-term loans payable 60,000 69,000 Common shares 130,000 130,000 Retained earnings 39,625 36,000 Total liabilities and shareholders' equity $295,625 $295,000