P11-72B. (Learning Objectives 2, 3, 4, 5, 7: Preparing and analyzing the statement of cash flows—indirect method) The comparative Balance Sheets of Marmaduke Movie Theater Company at June 30, 20X6 and 20X5, reported the following:

Marmaduke’s transactions during the year ended June 30, 20X6, included the following:

Requirements 1. Prepare Marmaduke Movie Theater Company’s statement of cash flows for the year ended June 30, 20X6, using the indirect method to report cash flows from operating activities. Report noncash investing and financing activities in an accompanying schedule.
2. Evaluate Marmaduke’s cash flows for the year, including its free cash flow and cash realization ratio. Review all three categories of cash flows and give the reason for your evaluation.

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A1 3 Current assets: 123456789012 Cash and cash equivalents Accounts receivable Inventories Prepaid expenses 8 Current liabilities: Accounts payable Accrued liabilities Income tax payable June 30 8,700 20X6 20X5 18,000 15,400 22,100 64,100 61,500 16,300 8,200 55,400 48,200 10,100 58,100 58,700 6,200