Tuit Inc., a greeting card company that follows ASPE, had the following statements prepared as at December 31, 2017:

Additional information:

1. Dividends on common shares in the amount of $6,000 were declared and paid during 2017.

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 2017.

"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 2017 $53,625 $25,000 58,000 40,000 5,000 54,000 2016 Cash Accounts Receivable Inventory Prepaid rent Equipment Accumulated depreciation- equipment Goodwill Total assets 51,000 60,000 4,000 130,000 (35,000) 25,000) 50,000 $295,625 $295,000 20,000 Accounts payable Income tax payable Salaries and wages payable Short-term loans payable Long-term loans payable Common shares Retained earnings Total liabilities and shareholders' equity$295,625$295,000 $46,000 4,000 8,000 8,000 60,000 130,000 39,625 40,000 6,000 4000 10,000 69,000 130,000 36,000 Tuit Inc Income Statement Year Ending December 31, 2017 Sales revenue Cost of good sold Gross margin Operating expenses Operating income Interest expense Impairment loss - goodwill Gain on sale of equipment Income before income tax Income tax expense Net income S338,150 165,000 173,150 120,000 53,150 $11,400 30,000 (2,000) 39,400 13,750 4,125 S9,625