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]

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 2012-2014 but started noticing its cash dwindle early in 2015. In January 2015, Consultex had paid $16.000 to purchase land and repaid $2,000 principal on an existing promissory note In March, the company paid $2,000 cash for dividends and $1,000 to repurchase Consultex stock that had previously been issued for S1.000. To improve its cash position, Consultex borrowed $5,000 by signing a new promissory note in May and also issued stock to a new private investor for S12,000 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2015 2014 Assets $11,000 $14,000 Cash Accounts Receivable 4.000 2,000 Prepaid Rent 2,000 3,000 26,000 0,000 Land Total Assets $53,000 $39,000 Liabilities and Stockholders' Equity Salaries and Wages Payable 2,000 3,000 Income Taxes Payable 1.000 12,000 Notes Payable (long-term) 5,000 Common Stock 20,000 9,000 5.000 4,000 Retained Earnings Total Liabilities and Stockholdors' Equity $53,000 $39,000 CONSULTEX, INC. Income Statement For the Year Ended October 31 2014 Sales Revenue $158,000 $161.000 Salaries and Wages Expense 98,000 97.000 36,000 30,000 19,700 20.000 Rent Expense Utilities Expenses Income before Income Tax Expense 4,300 14.000 ,300 4.200 Income Tax Expense 3,000 9,800 Net Income