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Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing
Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $19,500 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,700 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 $5,700 by signing a new promissory note in May and also issued stock to a new private investor for $12,700 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INCORPORATED Balance Sheet October 31 2021 2020 $ 8,899 15,400 2,350 30,500 $ 57,140 $ 14,500 12,700 3,700 11,000 $ 41,900 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 $ 2,350 1,100 16,400 21,300 15,990 $ 57,140 $ 3,700 1,100 12,700 9,700 14,700 $ 41,900 CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 161,500 98,700 36,700 20,400 5,700 2020 $ 164,500 97,700 30,700 20,700 15,400 4,620 $ 10,780 1,710 $ 3,990 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.) CONSULTEX, INCORPORATED Statement of Cash Flows For the Year Ended October 31, 2021 Cash Flows from Operating Activities: Changes in Current Assets and Current Liabilities Cash Flows from Investing Activities: Cash Flows from Financing Activities
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