The income statement and additional data of ENVIRO Consulting Ltd. follow:

Additional data:
a. Collections from clients are $7,000 more than revenues.
b. Increase in cash balance, $10,000.
c. Payments to employees are $4,000 less than salaries expense.
d. Interest expense and income tax expense equal their cash amounts.
e. Acquisition of property, plant, and equipment is $116,000. Of this amount, $101,000 is paid in cash, $15,000 by signing a long-term note payable.
f. Cash received from sale of land, $10,000.
g. Cash received from issuance of common shares, $42,000.
h. Payment of long-term note payable, $20,000.
i. Payment of cash dividends, $15,000.
j. Payments for rent and insurance are equal to expense.
k. Payment for office supplies is $6,000 more than expense.
l. Opening cash balance, $16,000.
Required
1. Assume ENVIRO Consulting Ltd. has adopted IFRS and elects to classify as operating activities all cash inflows and outflows for interest and dividends. Prepare ENVIRO Consulting Ltd.'s cash flow statement by the direct method for operating activities, and write a note to the financial statements providing a summary of non-cash investing and financing activities.
2. Assume ENVIRO Consulting Ltd. has adopted IFRS and elects to classify as investing or financing activities all cash inflows and outflows for interest and dividends. Prepare ENVIRO Consulting Ltd.'s cash flow statement by the direct method for operating activities, and write a note to the financial statements providing a summary of non-cash investing and financing activities.
3. Compare and summarize the effects of the accounting choice in Requirement 1 with that of Requirement 2. Can ENVIRO change the method used and classifications from one year to the next?

ENVIRO CONSULTING LTD. Income Statement For the Year Ended December 31, 2017 Revenues: Consulting revenue $274,000 Expenses: Salaries expense Depreciation expense Rent expense Office supplies expense In $148,000 29,000 12,000 3,000 2,000 2,000 18,000 surance expense Interest expense Income tax expense 214,000 S 60,000 Net income