Kate has just completed her first year running Kates 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, however, prepared a statement of cash flows. Kate provides you with the year-end income statement and balance sheet and asks that you prepare a statement of cash flows for Kates 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. Step 1: Calculate the change in all balance sheet accounts. Please note since this is the first year of Operations the change = the balance in the balance sheet account. Step 2: Classify each of the balance sheet accounts into one of the three cash flow categories: Operating, Investing, or financing. Step 3: Prepare a preliminary statement of cash flows using the change values from Step One and the activity classifications from Step two. Step 4: Integrate the income statement data by (a) replacing the change in retained earnings with net income and dividends, and (b) add back to net income the noncash expenses such as depreciation and amortization. Step 5: Remove any nonrecurring and/or nonoperating financial effects from net income.

**Increases in current assets reduce cashflows while decreases in current assets increase cashflows. Increases in current liabilities increase cashflows while decreases in current liabilities decrease cashflows.

I have attached a picture of the excel work. The pink boxes in the excel picture that are blank are what needs to be filled in. Thank you

Prepare a statement of cash flows for Kates Cards for the year ended August 31, 2019, using

the indirect method. Hint: Since this was Kates first year of operations, the beginning balance

sheet account balances were zero

Kate's Cards Statement of Cash Flows For the Year Ended August 31, 2019 Cash flows from operating activities Cash provided by operating activities $ Cash flow from investing activities Cash used by investing activities Cash flow from financing activities Cash provided by financing activities $ Increase in cash Cash balance, beginning of the year Cash balance, end of the year 0.00 $ $185,000 106,000 79,000 Sales revenue Cost of goods sold Gross profit. Operating expenses Wages Consulting Insurance Utilities Rent Depreciation Total operating expenses Income from operations Interest expense. Income before income tax Income tax expense. Net income 18,000 11,850 1,200 2,400 14,400 3,250 51,100 27,900 900 27,000 5,400 $ 21,600 $17.400 11,000 16,000 1,000 45,400 17,500 (3,250) $59,650 KATE'S CARDS Balance Sheet As of August 31, 2019 Assets Current assets Cash.... Accounts receivable Inventory Prepaid insurance Total current assets Equipment Accumulated depreciation Total assets Liabilities Current liabilities Accounts payable Unearned revenue Other current liabilities Total current liabilities. Note payable Total liabilities. Stockholders' equity Common stock. Additional paid-in-capital Preferred stock Retained earnings Total stockholders' equity. Total liabilities and stockholders' equity $ 6,200 1,250 1,900 9,350 15,000 24,350 500 9,500 5,000 20,300 35,300 $59,650