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Dive In Company was started several years ago by two diving instructors. The companys comparative balance sheets and income statement are presented below. Current Year
Dive In Company was started several years ago by two diving instructors. The companys comparative balance sheets and income statement are presented below. |
Current Year | Previous Year | |||||
Balance Sheet at December 31 | ||||||
Cash | $ | 4,180 | $ | 5,015 | ||
Accounts Receivable | 1,700 | 850 | ||||
Prepaid Expenses | 170 | 85 | ||||
$ | 6,050 | $ | 5,950 | |||
Salaries and Wages Payable | $ | 700 | $ | 1,800 | ||
Common Stock | 1,900 | 1,350 | ||||
Retained Earnings | 3,450 | 2,800 | ||||
$ | 6,050 | $ | 5,950 | |||
Income Statement | ||||||
Service Revenue | $ | 41,650 | ||||
Salaries and Wages Expense | 37,000 | |||||
Other Operating Expenses | 4,000 | |||||
Net Income | $ | 650 | ||||
Additional Data: |
a. | Prepaid Expenses relate to rent paid in advance. |
b. | Other Operating Expenses were paid in cash. |
c. | An owner contributed capital by paying $550 cash in exchange for the companys stock. |
Required: |
1. | Prepare the statement of cash flows for the current year ended December 31 using the DIRECT method. (Amounts to be deducted should be indicated by a minus sign.) |
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