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

Front Row Entertainment Inc.
Income Statement
For the year ended December 31, 2020
Revenues:
Sales revenue ................................................ $3,142,800
Service revenue .................................................. 636,000
Total revenues ............................................... $3,778,800
Expenses:
Artist fee expense ........................................... $2,134,260
Rent expense ..................................................... 952,663
Cost of goods sold ............................................... 74,800
Salaries and wages expense ................................... 345,100
Depreciation expense ............................................ 51,675
Interest expense .................................................. 98,087
Income taxes expense ........................................... 22,000
Other expenses ................................................... 26,550
Total expenses ............................................. $3,705,135
Net income ..................................................... $ 73,665
Additional Information:
1. Bonds payable of $1,500,000 were issued for $1,378,300 on July 1, 2020. During 2020, $12,170 of the discount on the bonds payable was amortized.
2. In January 2020, a $380,000 long-term note payable was issued in exchange for a building. No buildings were sold during the year.
3. On February 29, an $8,000 short-term note payable was issued in exchange for equipment. No equipment was sold during the year.
4. Cash dividends of $25,000 were declared and paid during 2020.
5. Common stock was issued for $40,000 cash during 2020.
6. Preferred stock was issued for $225,000 cash during 2020.
7. Treasury stock was purchased for $11,200 during 2020. Front Row reissued $4,800 of treasury stock in December 2020 for $6,600.
Required:
1. Prepare a statement of cash flows using the indirect method.
2. What conclusions can you draw about Front Row from the observed pattern of cash flows?