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 wel in 2012-2014 but started noticing its cash dwindle early in 2015. In January 2015, Consultex had paid $15,000 to purchase land and repaid $3,000 principal on an existing promissory note In March, the company paid $1,800 cash for dividends and $1,000 to repurchase Consultex stock that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $4,800 by signing a new promissory note in May and also issued stock to a new private investor for $11,800 cash. Year-end comparative balance sheets and income statements are presented below ONSULTEX, INC Balance Sheet October 31 2015 2014 Assets Cash Accounts Receivable Prepaid Rent Land $10,330 13,600 13,600 11,800 2,800 25,000 10,000 1,900 Total Assets $50,830 38200 Liabilities and Stockholders Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Eanings s 1,900 2,800 1,000 11,800 8,800 4,730 13,800 1,000 13,600 19,600 Total Liabilities and Stockholders' Equity $50,830 38,200 CONSULTEX, INC Income Statement For the Year Ended October 31 2015 2014 Sales Revenue $157,000 $160,000 Salaries and Wages Expense Rent Expense Utilities Expenses 97,800 96,800 35,800 29,800 19,800 19,500 Income before Income Tax Expense Income Tax Expense 1,170 4,080 Net Income $ 2,730 S 9,520