The income statement and additional data of Rayborn Services Inc
The income statement and additional data of Rayborn Services, Inc. follow:
Additional data follow:
a. Acquisition of plant assets totaled $116,000. Of this amount, $101,000 was paid in cash and a $15,000 note payable was signed for the remainder.
b. Proceeds from the sale of land totaled $22,000. No gain was recognized on the sale.
c. Proceeds from issuance of common shares total $34,000.
d. Payment of long-term note payable was $15,000.
e. Payment of dividends was $14,000.
f. Data from the comparative balance sheet follow:
1. Prepare Rayborn Services’ cash flow statement for the year ended April 30, 2014, using the indirect method.
2. Evaluate Rayborn Services’ cash flows for the year. In your evaluation, mention all three categories of cash flows and give the reason for your evaluation.
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