Coffee Now Inc. follows IFRS and has adopted the policy of classifying interest paid as operating activities and dividends paid as financing activities. Comparative SFP accounts of Coffee Now Inc., and its statement of income for the year ended December 31, 2020, follow:

December 31
	2020	2019	Change
Cash	$46,000	$56,000	$(10,000)
Cash equivalents (Note 1)	36,000	45,000	(9,000)
Accounts receivable	348,000	271,000	77,000
Prepaid insurance	16,000	35,000	(19,000)
Inventory	398,000	350,000	48,000
Supplies	13,000	17,000	(4,000)
Long-term investment, at equity (Note 7)	418,000	400,000	18,000
Land (Note 6)	640,000	500,000	140,000
Buildings (Note 3)	1,310,000	1,280,000	30,000
Accumulated depreciationbuildings	(400,000)	(360,000)	(40,000)
Equipment (Note 4)	632,000	640,000	(8,000)
Accumulated depreciationequipment	(160,000)	(135,000)	(25,000)
Patent	100,000	100,000	0
Accumulated amortization	(40,000)	(35,000)	(5,000)
	$3,357,000	$3,164,000	$193,000
Bank overdrafts (temporary)	$0	$93,000	$(93,000)
Accounts payable	165,000	150,000	15,000
Income tax payable	26,000	35,000	(9,000)
Accrued liabilities	57,000	41,000	16,000
Dividends payable	20,000	50,000	(30,000)
Long-term notes payable	420,000	460,000	(40,000)
Bonds payable	999,000	995,000	4,000
Preferred shares (Note 2)	486,000	380,000	106,000
Common shares	746,000	666,000	80,000
Retained earnings	438,000	294,000	144,000
	$3,357,000	$3,164,000	$193,000
Income Statement
Revenues
Sales revenue	$999,000
Investment income	90,000		$1,089,000
Expenses and losses
Cost of goods sold	314,000
Sales commission expense	108,000
Operating expenses (Note 5)	166,000
Salaries and wages expense	104,000
Interest expense	95,000
Loss on disposal of equipment (Note 4)	11,000
Income tax expense	96,000		894,000
Net income			$195,000

The following is additional information about Coffee Now's transactions during the year ended December 31, 2020.

1. The cash equivalents are typically term deposits that are very liquid and mature on average in 60 days. The bank overdrafts are temporary and reverse within a few days. Coffee Now has opted to show these as cash and cash equivalents on its statement of cash flows.
2. During the year, preferred shares with a carrying amount of $18,000 were converted to common shares.
3. There were no disposals of buildings during the year 2020.
4. Equipment with an original cost of $46,000 and carrying amount of $14,000 was sold at a loss during the year.
5. All depreciation and amortization expense is included in operating expenses.
6. During the year, Coffee Now obtained land with a fair value of $100,000 in exchange for its preferred shares.
7. Investment income includes the equity earnings of $62,000 from a long-term investment accounted for using the equity method and from interest revenue on the short-term investments referred to in note 1 above.

Instructions

a. Prepare the statement of cash flows for the year ended December 31, 2020, for Coffee Now Inc. using the indirect method. Prepare any additional disclosure notes that are required, including a table that shows the details of the cash and cash equivalents accounts at the end of each period.

b. Prepare the operating activities section of the statement using the direct format.

c. Does Coffee Now Inc. have any options available to it concerning the classification of interest and dividends paid or received?