Question
During a recent year (ended December 31, 2014), Nicoles Getaway Spa (NGS) reported net income of $2,500. The company reported the following activities: a. Increase
During a recent year (ended December 31, 2014), Nicoles Getaway Spa (NGS) reported net income of $2,500. The company reported the following activities:
a. Increase in inventories of $440.
b. Depreciation of $3,400.
c. The increase of $2,210 in prepaid expenses.
d. Payments of $5,000 on long-term debt.
e. Purchased new spa equipment for $7,622.
f. Payments on accounts payable exceeded purchases by $360.
g. Collections on accounts receivable exceeded credit sales by $899.
h. Issued $11,000 of common stock.
Required: Based on this information, prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method. Assume the cash balance at December 31, 2013, was $7,400. (List any deduction in cash and cash outflows as negative amounts.)
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