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Consultex Company was founded in 2014 as a small financial consulting business. The company had done reasonably well in 2014-2016, but noticed that its cash was beginning to dwindle early in 2017. In January 2017. Consultex had paid $19,100 to purchase land and repaid $3,150 principal on an existing promissory note. In March 2017, the company paid $2650 cash in dividends and $1000 to repurchase Consultex shares that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $6.900 by signing a new promissory note in May 2017 and also issued shares to a new private investor for $13,000 cash. Comparative balance sheets and income statements for the most recent fiscal year are presented below. CONSULTEX COMPANY Balance Sheet October 31 2017 2016 Assets Cash Accounts Receivable Prepaid Rent Land $13,660 $17,500 19,000 15,400 3,300 5,800 32,200 13,100 Total Assets $68, 160 $51,800 Liabilities and Shareholders Equity Wages Payable Income Taxes Payable Notes Payable (long-term) Contributed Capital Retained Earnings $ 1,150 5.050 16,700 25,000 20,260 $ 6. 150 5,050 12,950 13.000 14,650 Total Liabilities and Shareholders' Equity $68,160 $51,800 CONSULTEX COMPANY Income Statement For the Year Ended October 31 2017 2016 Sales Revenue $230,000 $237,800 Wages Expense 142,600 142,680 Rent Expense 42,000 36,000 Other Operating Expenses 33,600 29, 300 Income before Income Tax Expense Income Tax Expense 11,800 29,820 3,5408 ,950 8,260 $ 20,870 Net Income $ Required: 1. Prepare a properly formatted statement of cash flows for Consultex for the year ended October 31, 2017 using the Indirect method (Amounts to be deducted should be indicated by a minus sign.) CONSULTEX COMPANY Statement of Cash Flows For the Year Ended October 31, 2017 Cash flows from operating activities Changes in current assets and current liabilities Cash flows from investing activities Cash flows from financing activities 0 Net change in cash Beginning cash position, October 31, 2016 Ending cash position, October 31, 2017 S O XS Supply Company is developing its annual financial statements at December 31, 2017. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: 2017 2016 Balance Sheet at December 31 $ 43,485 $ 31,200 Merchandise Inventory Property and Equipment Less: Accumulated Depreciation 46.150 145,750 (38,100) 43.100 124,000 (31.000) $237,785 $197,000 $ 42,700 $ 32,900 Mocounts Payable Wages Payable Note Payable, Long-Term Contributed Capital Retained Earnings 42.900 53.400 30,300 $237,785 $197.000 Income Statement for 2017 $164,000 Cost of Goods Sold Other Expenses Net Income $ 21,580 Additional Data: a. Bought equipment for cash. $21,750. b. Paid $10.500 on the long-term note payable c. Issued new shares for $20,400 cash. d. No dividends were declared or paid. e Other expenses included depreciation, $7,100; wages, $24,100; taxes, $8,600; other, $7,500. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash Required: 1. Prepare the statement of cash flows for the year ended December 31, 2017, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) XS SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities: Adiustments to reconcile net income to net cash provided by operating activities: Cash flows from investing activities: Cash flows from financing activities: crease in cash during the year Cash balance, January 1, 2017 Cash balance, December 31, 2017
