ERIAL PROBLEM: KATE'S CARDS the: This is a continuation of the Serial Problem: Kate's Cards from Chapter I through Chapter II.) 2. Kate has just completed her first year running Kate's Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, the year-end income statement and bal, prepared a statement of cash flows. Kate provides you with for Kate's Cards. Additional information: 1. There were no disposals of equipment during the year. 2. Dividends in the amount of $1,300 were paid in cash during the year. 3. Prepaid expenses relate to operating expenses. Required a. Prepare a statement of cash flows for Kate's Cards for the year ended August 31 using the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance sheet account balances were zero. b. Prepare a statement of cash flows for Kate's Cards for the year ended August 31 using the direct method. (Appendix 12A) ment of Cash Fows KATE'S CARDS Balance Sheet As of August 31 Assets Current assets Liabilities Current liabilities Accounts payable Unearned revenue. Other current liabilities Total current liabilities Note payable.. Total liabilities . Stockhoiders' equity Common stock. Operating expenses Wanges: Woonsuling insurance Utilties Deprociation. Total operating expenses Incorse trom operations Interest exponse. Income before income tax Inoome tax expenso. Net income KATESA Balancos As of Augh Assets Current assets Cash. Accounts receivable inventory. Prepaid insurance. Total current assets Equipment .... Accumulated depreciation Total assets. Liabilities Current labilities Acoounts payable: Unoamed revenue. Oher current liabilities Total current liabilities. Note payable. Total liabilites Stookholders' 8 quity Common stock. Additional paid-in-capital Preferred stock. Retained earnings Totai stockholders' equity Totat liabilities and stockholders' equity KNOWLEDGE NG AND ANALYSIS ERIAL PROBLEM: KATE'S CARDS the: This is a continuation of the Serial Problem: Kate's Cards from Chapter I through Chapter II.) 2. Kate has just completed her first year running Kate's Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, the year-end income statement and bal, prepared a statement of cash flows. Kate provides you with for Kate's Cards. Additional information: 1. There were no disposals of equipment during the year. 2. Dividends in the amount of $1,300 were paid in cash during the year. 3. Prepaid expenses relate to operating expenses. Required a. Prepare a statement of cash flows for Kate's Cards for the year ended August 31 using the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance sheet account balances were zero. b. Prepare a statement of cash flows for Kate's Cards for the year ended August 31 using the direct method. (Appendix 12A) ment of Cash Fows KATE'S CARDS Balance Sheet As of August 31 Assets Current assets Liabilities Current liabilities Accounts payable Unearned revenue. Other current liabilities Total current liabilities Note payable.. Total liabilities . Stockhoiders' equity Common stock. Operating expenses Wanges: Woonsuling insurance Utilties Deprociation. Total operating expenses Incorse trom operations Interest exponse. Income before income tax Inoome tax expenso. Net income KATESA Balancos As of Augh Assets Current assets Cash. Accounts receivable inventory. Prepaid insurance. Total current assets Equipment .... Accumulated depreciation Total assets. Liabilities Current labilities Acoounts payable: Unoamed revenue. Oher current liabilities Total current liabilities. Note payable. Total liabilites Stookholders' 8 quity Common stock. Additional paid-in-capital Preferred stock. Retained earnings Totai stockholders' equity Totat liabilities and stockholders' equity KNOWLEDGE NG AND ANALYSIS