Tuit Inc., a greeting card company that follows ASPE, had the following statements prepared as of December 31, 2012:

Additional information:
1. Dividends on common shares in the amount of $6,000 were declared and paid during 2012.
2. Depreciation expense is included in operating expenses, as are salaries and wages expense of $69,000.
3. Equipment with a cost of $20,000 that was 70% depreciated was sold during 2012.
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?

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TUIT INC Comparative Balance Sheet December 31 2012 2011 Cash and cash equivalents Accounts receivable Inventories Prepaid rent Printing equipment Accumulated depreciation equipment Goodwill $51,000 58,000 40,000 5,000 154,000 (35,000) 20,000 $293,000 事 25,000 51,000 60,000 4,000 130,000 (25,000) 50,000 $295,000 Total assets Accounts payable Income taxes payable Wages payable Short-term loans payable Long-term loans payable Common shares Retained earnings 46,000 4,000 8,000 8,000 60,000 130,000 37,000 $293,000 $40,000 6,000 4,000 10,000 69,000 130,000 36,000 $295,000 Total liabilities and shareholders' equity TUIT INC Income Statement Year Ending December 31, 2012 $338,150 165,000 173,150 120,000 53,150 Sales Cost of goods sold Gross margin Operating expenses Operating income Interest expense Impairment loss goodwill Gain on sale of equipment Income before tax Income tax expense Net income $11,400 30,000 (2,000) 39,400 13,750 6,750 $ 7,000