Consultex Company was founded in 2017 as a small financial consulting business. The company had done reasonably well in 2017- 2019, but noticed that its cash was beginning to dwindle early in 2020. In January 2020, Consultex had paid $17,850 to purchase land and repaid $3,900 principal on an existing promissory note. In March 2020, the company paid $1,000 cash in dividends and $1,000 to repurchase Consultex shares that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $6,350 by signing a new promissory note in May 2020 and also issued shares to a new private investor for $5,000 cash. Comparative balance sheets and income statements for the most recent fiscal year are presented below. CONSULTEX COMPANY Balance Sheet October 31 Assets Cash Accounts Receivable Prepaid Rent Land Total Assets Liabilities and Shareholders' Equity Wages Payable Income Taxes Payable Notes Payable (long-term) Contributed Capital Retained Earnings Total Liabilities and Shareholders' Equity 2020 2019 $10,600 $14,800 16,450 14,350 4,100 5,150 13,350 31,200 $62,350 $47,650 $ 5,050 $6,300 1,750 15,800 9,000 1,750 13,350 5,000 30,750 21,250 $62,350 $47,650 Sales Revenue Wages Expense CONSULTEX COMPANY Income Statement For the Year Ended October 31 Rent Expense Other Operating Expenses Income before Income Tax Expense Income Tax Expense Net Income 2020 $140,000 2019 $143,300 86,800 85,980 18,000 12,000 20,200 20,400 15,000 24,920 4,500 7,480 $ 10,500 $ 17,440 Required: 1. Prepare a properly formatted statement of cash flows for Consultex for the year ended October 31, 2020 (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, 2020 Cash flows from operating activities Net income $ 10,500 Changes in current assets and current liabilities Accounts receivable (2,100) Prepaid rent 1,050 Wages payable 1,250 Cash provided by operating activities 10,700 Cash flows from investing activities Purchased land 17,850 Cash provided by investing activities 17,850 Cash flows from financing activities Paid cash dividends Issued new company shares 4,000 Repaid promissory note principal 2,540 Net change in cash 6,540 Beginning cash position, October 31, 2016 Ending cash position, October 31, 2017 $ 0