1. Explain the difference between net income and cash flow from operating activities for Dragoon in 2015.
2. Analyze Dragoons cash flows for 2015.

Prepare a statement of cash flows using the indirect method.

Particulars	Amount (in $)	Amount (in $)
Net Income for the year	$ 1,050
Add: Provision for income tax	$ 350
Add: Provision Interest Payable	$ 150
Add: Depreciation	$ 100
Income before depreciation, interest and tax		$ 1,650
Less: Income tax Paid		$ (200)
Profit after Tax		$ 1,450
Working Capital Adjustment:
Increase in accounts receivables	$ (550)
Decrease in inventory	$ 110
Increase in accounts payable	$ 300
Decrease in wages payable	$ (100)	$ (240)
A. Cash from operating activities		$ 1,210
Purchase of plant and equipment	$ (700)
Decrease In long term investment	$ 140
B. Cash from Investing Activities		$ (560)
Interest paid (120 +150 70)	$ (200)
Bonds Paid	$ (300)
Increase in capital Stock	$ 70
Increase in Paid-in Capital	$ 330
Dividend paid	$ (200)
C. Cash from Financing Activities		$ (300)
Change in Cash		$ 350
Opening Balance of Cash		$ 850
Closing Balance of Cash		$ 1,200

Dragoon Enterprises Comparative Balance Sheets December 31, 2015 and 2014 2015 2014 $ $ 1,200 1,750 1,250 4,600 (1,200) Cash Accounts receivable Inventory Plant and equipment Accumulated depreciation Long-term investments Total Assets Accounts payable Accrued wages payable Interest payable Income tax payable Bonds payable Capital stock Paid-in capital Retained earnings Total Liabilities and Equity 850 1,200 1,360 3,900 (1,100) 1,110 7,320 800 350 970 8,570 1,100 250 70 120 50 200 1,100 1,000 400 4,450 $8,570 1,400 930 70 3,600 $7,320 Income Statement for Year Ended December 31, 2015 $ 9,500 6,650 2,850 Sales Cost of goods sold Gross profit Other expenses Selling and administrative Depreciation Interest Income tax Net income 1,200 100 150 350 $ 1,050