The income statement and additional data of Rayborn Services, Inc., follow:

Additional data follows:

a. Acquisition of plant assets totaled \($116,000.\) Of this amount, \($101,000\) was paid in cash and a \($15,000\) note payable was signed for the remainder.

b. Proceeds from the sale of land totaled \($22,000.\) No gain was recognized on the sale.

c. Proceeds from issuance of common stock total \($34,000\).

d. Payment of long-term note payable was \($15,000\).

e. Payment of dividends was \($14,000\).

f. Data from the comparative balance sheet follow:

Requirements

1. Prepare Rayborn Services’ statement of cash flows for the year ended April 30, 2010, using the indirect method.
2. Evaluate Rayborn Services’ cash flows for the year. In your evaluation, men¬ tion all three categories of cash flows and give the reason for your evaluation.

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Revenues: Rayborn Services, Inc. Income Statement Year Ended April 30, 2010 Sales Revenue $262,000 Dividend Revenue 11,000 Total Revenues $273,000 Expenses: Cost of Goods Sold $107,000 Salary Expense 60,000 Depreciation Expense 18,000 Advertising Expense 14,000 Interest Expense 9,000 Income Tax Expense 8,000 Total Expenses Net Income 216,000 $ 57,000