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Heads Up Company was started several years ago by two hockey instructors. The companys comparative balance sheets and income statement follow, along with additional information.

Heads Up Company was started several years ago by two hockey instructors. The companys comparative balance sheets and income statement follow, along with additional information.

Current Year Previous Year
Balance Sheet at December 31
Cash $ 6,120 $ 4,140
Accounts Receivable 910 1,770
Equipment 5,610 5,100
Accumulated DepreciationEquipment (1,520 ) (1,260 )
Total Assets $ 11,120 $ 9,750
Accounts Payable $ 590 $ 1,100
Salaries and Wages Payable 490 750
Note Payable (long-term) 1,500 500
Common Stock 5,100 5,100
Retained Earnings 3,440 2,300
Total Liabilities and Stockholders Equity $ 11,120 $ 9,750
Income Statement
Service Revenue $ 37,700
Salaries and Wages Expense 35,200
Depreciation Expense 260
Income Tax Expense 1,100
Net Income $ 1,140

Additional Data:

  1. Bought new hockey equipment for cash, $510.
  2. Borrowed $1,000 cash from the bank during the year.
  3. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash.

image text in transcribed

Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be Indicated with a minus slgn.) HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Decrease in Accounts Receivable Cash Flows from Investing Activities: esting Activities Cash Flows from Financing Activities: Cash Balance, January 1 Cash Balance, December 31

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