Question
Clear Strategy Corp., a strategic marketing consulting firm, began operations on January 1, 2016. Its post-closing trial balance at December 31, 2016, and 2017, is
Clear Strategy Corp., a strategic marketing consulting firm, began operations on January 1, 2016. Its post-closing trial balance at December 31, 2016, and 2017, is shown below along with some other information.
Other information regarding Clear Strategy Corp. and its activities during 2017:
- Assume all accounts have normal balances.
- Share dividends were declared and issued during the year.
- Equipment was sold for cash equal to its book value.
Required:
Using the information provided, prepare a statement of cash flows (applying the indirect method) for the year ended December 31, 2017.
2:
Required: Refer to the information in Question 1. Prepare a statement of cash flows for 2017 using the direct method to report cash inflows and outflows from operating activities.
Other information:
- All accounts payable balances result from other expenses.
- All consulting revenue is done on credit.
- All credits to accounts receivable are receipts from customers.
- All debits to accounts payable result from payments for other expenses.
Required:
Prepare a statement of cash flows for 2017 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also, prepare a note describing non-cash investing and financing activities.
Clear Strategy Corp. Income Statement For Year Ended December 31, 2017 (millions) Revenues: Consulting revenue.. Expenses: Salaries expense.. 8,750 4,700 Other expenses...... 1,600 Depreciation expense Total expenses... 400 6,700 Profit from Operations. Income tax expense. 2,050 . ... 350 Profit . 1,700
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