9 Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $21,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $3,000 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $6,000 by signing a new promissory note in May and also issued stock to a new private investor for $13,000 cash. Year-end comparative balance sheets and income statements are presented below. 00:37:36 CONSULTEX, INC. Balance Sheet October 31 2018 2017 $ 8,410 $15,100 16,000 13,000 2,500 4,000 32,000 11,000 $58,910 $43, 100 Assets Cash Accounts Receivable Prepaid Rent Land Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 1,100 $ 2,500 $ 4,000 1,100 17,000 13,000 21,900 10,000 16,410 15,000 $58,910 $43, 100 CONSULTEX, INC. Income Statement For the Year Ended October 31 2018 2017 Sales Revenue $163,000 $166,000 Salaries and Wages Expense 99,000 98,000 Rent Expense 37,000 31,000 Utilities Expenses 20,700 21,000 Income before Income Tax Expense 6,300 16,000 Income Tax Expense 4,800 Net Income $ 4,410 $ 11, 200 1,890 9 CONSULTEX, INC. Statement of Cash Flows For the Year Ended October 31, 2018 Cash Flows from Operating Activities: Net Income Changes in Current Assets and Current Liabilities Accounts Receivable Prepaid Rent Salaries and Wages Payable W 00:36:46 0 Cash Provided by Operating Activities Cash Flows from Investing Activities: Purchased Land 0 Cash Used in Investing Activities Cash Flows from Financing Activities: Issued New Company Common Stock Repaid Promissory Note Principal Repurchased Company Common Stock Issued New Promissory Note Paid Cash Dividends 0 Cash Provided by Financing Activities Net Decrease in Cash Beginning Cash Position, October 31, 2017 Ending Cash Position, October 31, 2018 $ 0