E17-6 The income statement and additional data of Gillette Satellite Network, Inc., follow. GILLETTE SATELLITE NETWORK, INC. Revenues: Income Statement Year Ended September 30, 20X2 Sales revenue... $252.000 Expenses: Cost of goods sold. $115,000 Salary expense.... 45.000 Depreciation expense 29,000 Rent expense 11.000 Interest expense... 2,000 Income tax expense 9,000 211,000 Net income.. $ 41,000 Additional data during fiscal year 20X2:

a. Collections from customers were $7,000 more than sales.

b. Payments to suppliers were $5,000 less than the sum of cost of goods sold plus rent expense.

c. Payments to employees were $1,000 more than salary expense.

d. Interest expense and income tax expense equal their cash amounts.

e. Acquisition of equipment was $135,000. Of this amount. $100,000 was paid in cash and the remainder by signing a long-term note payable. Gillette sold no equipment during fiscal year 20X2.

f. Proceeds from sale of land, S$14.000. g. Proceeds from issuance of common stock, $35,000. h. Payment of long-term note payable. $20.000. i. Payment of dividends. $10,000. j. No change in cash balance. The balance at September 30, 20X1. was $18,000. Required 1. Prepare Gillette Satellite Network's statement of cash flows and accompanying schedule of noncash investing and financing activities. Report operating activities by the direct method. 2. Evaluate Gillette Satellite Network's cash flows for the year. Mention all three categories of cash flows, and give the reason for your evaluation.