The income statement and comparative balance sheet for Front Row Entertainment is shown below:

Required:
1. Prepare a statement of cash flows using the indirect method.
2. What conclusions can you draw about Front Row Entertainment from the observed pattern of cash flows?

Front Row Entertainment Inc. Front Row Entertainment Inc. Income Statement For the Year Ended December 31, 2012 nce December 31, 2012 and 2011 $3,142,800 636,000 $3,778,800 Sales revenue $30,322 98,250 9,005 Expenses: $2,134,260 952,663 Artist fee expense Cost of goods sold Salaries and wages expense Depreciation expense Interest expense 345,100 51,675 98,087 Total current assets 325,552 $89,755 Property, plant, and equipment: 1,857,250 $3.705,135 $73,665 Total expenses Trademark 25,000 $2,181,317 $94,595 Additional Information: LUABILITIES AND EQUITY 1. Bonds payable of $1,500,000 were issued for $1,378,300 on July 1, 2012. Dring 2012, $12,170 of the discount on 3,90 2. In January 2012, a $380,000 long-term note payable was Current liabilities: $12,240 the bonds payable was amortized Salaries payable issued in exchange for a building. No buildings were sold dur- 2,180 3 On February 29, an $8,000 short-term note payable was issued in exchange for equipment. No equipment was sold s of $25,000 were declared and paid during Noes payable Ishort-term Total current liabilities $410 durik the end 56,197 were Long-term liabilities: 405,000 1,500,000 25,000 5. 6. 7. Common stock was issued for $40,000 cash during 2012 Preferred stock was issued for $225,000 cash during 2012 Treasury stock was purchased for $11,200 during 2012. Front Row reissued $4,800 of treasury stock n December 2012 for $6,600 Less: Discount on bond payable Tolal long term liabili0 $25,00 F 150,000 Preferred stock Common stock Paidin capital in excess of par: 16,000 Prefermed stock Common stock 3 4,585 $20,585 $94,595 Tolal liabilities and equity