Dive In Company was started several years ago by two diving instructors. The company€™s comparative balance sheets and income statement are presented below, along with additional information.

Additional Data:
a. Prepaid expenses relate to rent paid in advance.
b. Other operating expenses were paid in cash.
c. Purchased equipment for $300 cash at the end of 2008 to be used starting in 2009.
d. An owner contributed capital by paying $200 cash in exchange for the company€™s stock.

Required:
Prepare the statement of cash flows for the year ended December 31, 2008, using the indirectmethod.

Transcribed Image Text:

2008 2007 Balance sheet at December 31 Cash Accounts receivable Prepaid expenses Equipment S 3.200 700 100 300 S 4,300 S 4,000 500 50 S 4,550 Wages payable Contributed capital Retained earnings S 350 1,200 2,750 4,300 1,100 1,000 2.450 $ 4,550 Income statement for 2008 Lessons revenue Wages expense Other expenses Net income S33.950 30,000 3,650 S 300