E12-13 Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative Balance Sheets and Income Statements [LO 12-1, LO 12-2, LO 12-3, LO 12-4, LO 12-5]

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 $18,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,400 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 $5,400 by signing a new promissory note in May and also issued stock to a new private investor for $12,400 cash. Year-end comparative balance sheets and income statements are presented below.

CONSULTEX, INC Balance Sheet October 31 2014 2015 Assets $ 9,370 13,900 12,400 3,400 11,000 Cash Accounts Receivable Prepaid Rent Land 14,800 2,200 29,000 $55,370 40,700 Total Assets Liabilities and Stockholders' Equity $ 2,200 1,100 15,800 20,700 15,570 3,400 1,100 12,400 9,400 14,400 Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earninas $55,370 40,700 Total Liabilities and Stockholders' Equity CONSULTEX, INC. Income Statement For the Year Ended October 31 2014 2015 $160,000 $163,000 97,400 30,400 20,400 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses 98,400 36,400 20,100 14,800 4,440 Income before Income Tax Expense Income Tax Expense 5,100 1,530 $ 3,570$ 10,360 Net Income 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.) CONSULTEX, INC Statement of Cash Flows For the Year Ended October 31, 2015 Cash Flows from Operating Activities: Changes in Current Assets and Current Liabilities Cash Flows from Investing Activities: Cash Flows from Financing Activities