| | Consultex, Inc. was founded in 2012 as a small financial consulting business. The company had done reasonably well in 20122014 but started noticing its cash dwindle early in 2015. In January 2015, Consultex had paid $13,000 to purchase land and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. | | | | CONSULTEX, INC. | | Balance Sheet | | October 31 | | | 2015 | 2014 | | Assets | | | | | | | Cash | $ | 8,970 | | $ | 11,900 | | Accounts Receivable | | 12,800 | | | 11,400 | | Prepaid Rent | | 1,700 | | | 2,400 | | Land | | 24,000 | | | 11,000 | | | | | | | | | Total Assets | $ | 47,470 | | $ | 36,700 | | | | | | | | | Liabilities and Stockholders Equity | | | | | | | Salaries and Wages Payable | $ | 1,700 | | $ | 2,400 | | Income Taxes Payable | | 1,100 | | | 1,100 | | Notes Payable (long-term) | | 11,800 | | | 11,400 | | Common Stock | | 18,700 | | | 8,400 | | Retained Earnings | | 14,170 | | | 13,400 | | | | | | | | | Total Liabilities and Stockholders Equity | $ | 47,470 | | $ | 36,700 | | | | | | | | | | | CONSULTEX, INC. | | Income Statement | | For the Year Ended October 31 | | | 2015 | 2014 | | Sales Revenue | $ | 155,000 | | $ | 158,000 | | Salaries and Wages Expense | | 97,400 | | | 96,400 | | Rent Expense | | 35,400 | | | 29,400 | | Utilities Expenses | | 19,100 | | | 19,400 | | | | | | | | | Income before Income Tax Expense | | 3,100 | | | 12,800 | | Income Tax Expense | | 930 | | | 3,840 | | | | | | | | | Net Income | $ | 2,170 | | $ | 8,960 | | | | | | | | | | | Required: | | Prepare a properly formatted Statement of Cash Flows for Consultex, Inc. for the year ended October 31, 2015 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.) | | | | | |
| | | | | | Sales | | | $ | 72,000 | | Expenses: | | | | | | Cost of Goods Sold | $ | 46,000 | | | | Depreciation Expense | | 5,200 | | | | Salaries and Wages Expense | | 11,200 | | 62,400 | | | | | | | | Net Income | | | $ | 9,600 | | | | | | | | Accounts Receivable Decrease | $ | 3,200 | | | | Inventory Increase | | 7,200 | | | | Salaries and Wages Payable Increase | | 670 | | | | | | Required: | | Present the operating activities section of the statement of cash flows for Guys Gear Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) | | GUYS GEAR COMPANY | | Cash Flow from Operating ActivitiesIndirect Method | | | | | Adjustments to Reconcile Net Income to Cash Provided by Operating Activities | | | | | | | | | Changes in Current Assets and Current Liabiliti | | | | |
