The comparative balance sheets of Shaw Movie Theater Company at June 30, 2018 and 2017, reported the following:

Shaw’s transactions during the year ended June 30, 2018, included the following:

Requirements

1. Prepare Shaw Movie Theater Company’s statement of cash flows for the year ended June 30, 2018, using the indirect method to report cash flows from operating activities. Report noncash investing and financing activities in an accompanying schedule.

2. Evaluate Shaw’s cash flows for the year. Mention all three categories of cash flows, and give the rationale for your evaluation.

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A1 June 30, 2018 2017 3 Current assets: Cash and cash equivalents Accounts receivable Inventories Prepaid expenses 8 Current liabilities: 9. $ 3,600 14,700 63,400 3,700 $ 15,000 22,000 60,300 4,000 Accounts payable Accrued liabilities Income tax payable $ 58,100 23,900 9,600 $ 56,200 16,900 10,700 10 11 12 Acquisition of land by issuing note payable . Amortization expense. . Payment of cash dividend.. Cash purchase of equipment . Issuance of long-term note payable to borrow cash.. Proceeds from sale of long- term investment . Depreciation expense Cash purchase of building . Net income... Issuance of common stock for cash. Stock dividend. . $ 12,300 15,000 $96,000 9,000 25,000 52,000 44,000 79,000 9,000 43,000 15,000