(Learning Objective 3, 4, 5, 7: Preparing and analyzing the statement of cash fl ows

—indirect method) The income statement and additional data of Newbury Travel Products, Inc., follow:

Additional data:

a. Acquisition of PPE was $212,000. Of this amount, $160,000 was paid in cash and

$52,000 by signing a note payable.

b. Proceeds from sale of land totaled $27,000.

c. Proceeds from issuance of shares totaled $80,000.

d. Payment of long-term note payable was $17,000.

e. Payment of dividends was $13,000.

f. From the balance sheets:

❙ Requirements 1. Prepare Newbury’s statement of cash fl ows for the year ended December 31, 20X6, using the indirect method.

2. Evaluate Newbury’s cash fl ows for the year, including its free cash fl ow and cash realization ratio. In your evaluation, review all three categories of cash fl ows and give the reason for your evaluation.