500 Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information Current Year Previous Year Balance Sheet at December 31 Cash $ 6,480 $ 4,840 Accounts Receivable 860 1,670 Equipment 4,840 4,600 Accumulated Depreciation-Equipment (1,280) (1,210 Total Assets $ 10,900 $ 9, 100 Accounts Payable $ 740 $ 1,200 Salaries and Wages Payable 540 750 Notes Payable (long-term) 1,600 Common Stock 4,600 4,600 Retained Earnings 3,420 2,85e Total Liabilities and Stockholders' Equity $ 10,900 $ 9, 100 Income Statement Service Revenue $ 40,300 Salaries and Wages Expense 37,800 Depreciation Expense 460 Loss on Disposal of Equipment 510 Income Tax Expense 160 Net Income $ 1,370 Additional Data: a. Bought new equipment for $1600 cash and sold existing equipment for $460 cash. The equipment that was sold had cost $1,360 and had Accumulated Depreciation of $390 at the time of sale. b. Borrowed $1100 cash from the bank during the year c Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. Additional Data: a. Bought new equipment for $1,600 cash and sold existing equipment for $460 cash. The equipment that was sold had cost $1,360 and had Accumulated Depreciation of $390 at the time of sale. b. Borrowed $1,100 cash from the bank during the year c Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income $ 1,370 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense 460 810 Changes in Current Assets and Current Liabilities Decrease in Accounts Receivable Decrease in Accounts Payable Decrease in Salaries and Wages Payable (460) (210) 1,970 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment 240 240 Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan 1.100 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 1,100 2,830 x >> 4,040 $ 6,870