Condensed financial data of Tobita Limited, which follows ASPE, for 2011 and 2010 follow:

Additional information: During the year, $70 of common shares were issued in exchange for plant assets. No plant assets were sold in 2011.
Instructions
(a) Prepare a statement of cash flows using the indirect method.
(b) Prepare a statement of cash flows using the direct method.
(c) Does Tobita Limited have any options on how to classify interest and dividends paid on the statement of cash flows?
(d) What would you consider to be an alarming trend that is revealed by the statements that you have prepared? Is it as easy to notice this trend using the direct method, as in part (b)?

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TOBITA LIMITED Comparative Balance Sheet December 31 2011 Cash Receivables Inventory Plant assets Accumulated depreciation Long-term investments (FV-NI) $1,800 1,750 1,600 1,900 (1,200) 1,300 $7,150 2010 $1,150 1,300 1,900 1,700 (1,170) 1,420 $6,300 Accounts payable Accrued liabilities Bonds payable Share capital Retained earnings $1,200 200 1,400 1,900 2,450 $7,150 $900 250 1,550 1,700 1,900 $6,300 TOBITA LIMITED Income Statement Year Ended December 31, 2011 $6,900 4,700 2,200 910 1,290 Cost of goods sold Gross margin Selling and administrative expense Income from operations Other expenses and gains $(20) 80 Interest expense Gain on sale of investments (FV-NI) Income before tax Income tax expense Net income 60 1,350 540 $ 810