The income statement of Flashpoint Consulting Ltd. is shown here:

Additional data during fiscal year 2020 includes:

a. Acquisition of computer equipment was $232,000. Of this amount, $202,000 was paid in cash and $30,000 by signing a long-term note payable. Flashpoint Consulting Ltd. sold no computer equipment during fiscal year 2020.

b. Cash received from sale of land, $20,000.

c. Cash received from issuance of common shares, $84,000.

d. Payment of long-term note payable, $40,000.

e. Payment of dividends, $130,000.

f. Change in cash balance, $?

g. From the comparative balance sheet at September 30:

Required

1. Prepare Flashpoint Consulting Ltd.’s cash flow statement for the year ended September 30, 2020, using the indirect method.

2. Evaluate Flashpoint Consulting Ltd.’s 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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FLASHPOINT CONSULTING LTD. Income Statement For the Year Ended September 30, 2020 Revenues Consulting revenue $548,000 Expenses Salaries expense $296,000 Amortization expense 58,000 Rent expense 14,000 Office supplies expense 16,000 Insurance expense 4,000 Interest expense 4,000 Income tax expense 36,000 428,000 Net income $120,000