E11-20A. (Learning Objectives 3, 4, 5, 7: Preparing and analyzing the statement of cash flows-indirect method) The Income Statement and additional data of Newbury Travel Products, Inc., follow A1 Newbury Travel Products, Inc Income Statement Year Ended December 31, 20X6 1 2 Revenues: 283,000 8,000 $ Service revenue Dividend revenue Expenses Cost of goods sold 7 291,000 103,000 78,000 26,000 6 Salary expense Depreciation expense Advertising expense Interest expense Income tax expense Net income 8 9 4,500 2,600 8,000 10 11 222,100 68,900 Additional data: a. Acquisition of PPE was $222,000. Of this amount, $170,000 was paid in cash and $52,000 by signing a note payable. b. Proceeds from sale of land totaled $28,000. c. Proceeds from issuance of shares totaled $90,000. d. Payment of a long-term note payable was $18,000. e. Payment of dividends was $13,000 f. From the Balance Sheets A1 December 31 20X5 2 20X6 Current assets: Cash $ 30,000 $ 10,800 Accounts receivable 5 42,000 30,000 59,000 91,000 8,700 Inventory Prepaid expenses 9,400 9 Current liabilities: Accounts payable Accrued liabilities $ 38,000 18,000 $27,000 99,000 Requirements 1. Prepare Newbury's statement of cash flows for the year ended December 31, 20X6, using the indirect method 2. Evaluate Newbury's cash flows for the year, including its free cash flow and cash realiza- tion ratio. In your evaluation, review all three categories of cash flows and give the reason for your evaluation. O789910