The income statement and additional data of Specialized 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 sale of land totaled \($24,000.\) No gain was recognized on the sale.

c. Proceeds from issuance of common stock totaled \($30,000\).

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

e. Payment of dividends was \($11,000\).

f. Data from the comparative balance sheet follow:

Requirements

1. Prepare Specialized Services’ statement of cash flows for the year ended June 30, 2010, using the indirect method.
2. Evaluate Specialized Services’ cash flows for the year. In your evaluation, mention all three categories of cash flows and give the reason for your evaluation.

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Revenues: Specialized Services, Inc. Income Statement Year Ended June 30, 2010 Sales Revenue Dividend Revenue $229,000 8,000 Total Revenues $237,000 Expenses: Cost of Goods Sold $103,000 Salary Expense 45,000 Depreciation Expense 28,000 Advertising Expense 12,000 Interest Expense 2,000 Income Tax Expense 9,000 Total Expenses Net Income 199,000 $ 38,000