The accounting records of Rising Star Talent Agency reveal the following:

Net Income ...................$22,000

Depreciation ................... 12,000

Sales Revenue ................... 9,000

Decrease in current liabilities ........... 20,000

Loss on sale of land .............. 5,000

Increase in current assets other than Cash ..... 27,000

Acquisition of land .............. 37,000

Requirements

1. Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section shown in Exhibit 11-3.

2. Evaluate the operating cash flow of Rising Star Talent Agency. Give the reason for your evaluation.

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Mackay Industries, Inc Cash Flow Statement Year Ended December 31, 2014 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operating activities + Depreciation / amortization expense +Loss on sale of long-term assets - Gain on sale of long-term assets - Increases in current assets other than cash + Decreases in current assets other than cash + Increases in current liabilities - Decreases in current liabilities Net cash provided by operating activities + Cash flows from investing activities + Cash receipts from sales of long-term assets (investments, land, building, equipment, and so on) - Purchases of long-term assets Net cash provided by (used for) investing activities ± Cash flows from financing activities: +Cash receipts from issuance of shares + Sale of treasury shares Purchase of treasury shares + Cash receipts from issuance of notes or bonds payable (borrowing) - Payment of notes or bonds payable -Payment of dividends Net cash provided by (used for) financing activities - Net increase (decrease) in cash during the year + Cash at December 31, 2013 - Cash at December 31, 2014