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 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $14,500 to purchase land and repaid $3,000 principal on an existing promissory note. In March, the company paid $1,700 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,700 by signing a new promissory note in May and also issued stock to a new private investor for $11,700 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2018 2017 $ 9,490 $12,500 13,400 11,700 1,850 2,700 25,500 11,000 $50,240 $37,900 Assets Cash Accounts Receivable Prepaid Rent Land Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $ 1,850 $ 2,700 1,100 1,100 13,400 11,700 19,300 8,700 14,590 13,700 $50,240 $37,900 CONSULTEX, INC. Income Statement For the Year Ended October 31 2018 2017 Sales Revenue $156,500 $ 159,500 Salaries and Wages Expense 97,700 96,700 Rent Expense 35,700 29,700 Utilities Expenses 19,400 19,700 Income before Income Tax Expense 3,700 13,400 Income Tax Expense 1,110 4,020 Net Income $ 2,590 $ 9,380 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended October 31, 2018 (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, 2018 Cash Flows from Operating Activities: Changes in Current Assets and Current Liabilities Cash Flows from Investing Activities: Cash Flows from Financing Activities