E11-31B. (Learning Objectives 3, 4, 5, 7: Preparing and analyzing the statement of cash flows- indirect method) The Income Statement and additional data of Norton Travel Products, Inc., follow: A1 2 Year Ended December 31, 20X6 235,000 8,300 243,300 Norton Travel Products, Inc. Income Statement 2 Revenues: 3 Service revenue 4 Dividend revenue 5 Expenses: 6 Cost of goods sold Salary expense 8 Depreciation expense 9 Advertising expense 10 Interest expense 11 Income tax expense 12 Net income 13 7 102,000 62,000 33,000 4,300 2,400 7,000 210.700 32,600 Additional data: a. Acquisition of PPE was 180,000. Of this amount, 145,000 was paid in cash and 35.000 by signing a note payable. b. Proceeds from sale of land totaled 49.000. c. Proceeds from issuance of shares totaled 34.000. d. Payment of long-term note payable was 16,000. e. Payment of dividends was 9,000. f. From the Balance Sheets: A1 December 31 20X6 20X5 1 2 3 Current Assets: 4 Cash 5 Accounts receivable 6 Inventory 7 Prepaid expenses 8 9 Current Liabilities: 10 Accounts payable 11 Accrued liabilities 12 32,000 41,000 48,000 9,100 13,300 57,000 87,000 8,200 32,000 14,000 17,000 43,000 Requirements 1. Prepare Norton's statement of cash flows for the year ended December 31, 20X6, using the indirect method. 2. Evaluate Norton's cash flows for the year, including its free cash flow and cash realization ratio. In your evaluation, review all three categories of cash flows and give the reason for your evaluation