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?

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Front Row Entertainment Inc. Balance Sheets December 31, 2020 and 2019 2020 2019 ASSETS Current assets: $ 30,322 98,250 133,400 2,200 61,380 $ 325,552 $ 9,005 17,000 57,200 3,700 Cash Accounts receivable, net Prepaid expenses Supplies Inventory Total current assets 2,850 $89,755 Property, plant, and equipment: Building Equipment Accumulated depreciation Trademark 1,857,250 27,350 (53,835) 25,000 $2,181,317 7,000 (2,160) $94,595 Total assets LIABILITIES AND EQUITY Current liabilities: Accounts payable Salaries payable Interest payable Unearned sales revenue Income taxes payable Notes payable (short-term) Total current liabilities 2$ 2,450 2,500 40,917 1,780 $12,240 3,690 2,250 28,650 2,180 550 8,000 $ 56,197 $49,010 Long-term liabilities: Notes payable Bonds payable, net Less: Discount on bond payable Total long-term liabilities Equity: Preferred stock $ 405,000 1,500,000 $25,000 (109,530) $1,795,470 $25,000 $ 150,000 18,000 $4 Common stock 16,000 Paid-in capital in excess of par: Preferred stock Common stock 75,000 38,000 1,800 53,250 Treasury stock Retained earnings Less: Treasury stock Total equity Total liabilities and equity 4,585 (6,400) $ 329,650 $2,181,317 $20,585 $94,595