Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please provide how to find out the values! Consultex Company was founded in 2014 as a small financial consulting business. The company had done reasonably
Please provide how to find out the values!
Consultex Company was founded in 2014 as a small financial consulting business. The company had done reasonably well in 2014- 2016, but noticed that its cash was beginning to dwindle early in 2017. In January 2017, Consultex had paid $19,700 to purchase land and repaid $3,650 principal on an existing promissory note. In March 2017, the company paid $1,100 cash in dividends and $1,000 to repurchase Consultex shares that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $7,250 by signing a new promissory note in May 2017 and also issued shares to a new private investor for $5,500 cash. Comparative balance sheets and income statements for the most recent fiscal year are presented below. CONSULTEX COMPANY Balance Sheet October 31 2017 2016 Assets Cash Accounts Receivable Prepaid Rent Land $ 8,960 $16,150 18,750 16,550 2,200 5,750 32,550 12,850 Total Assets $62,460 $51,300 Liabilities and Shareholders' Equity Wages Payable Income Taxes Payable Notes Payable (long-term) Contributed Capital Retained Earnings $ 1,600 $ 3,100 5,400 5,400 18,250 14,650 10,000 5,500 27,210 22,650 Total Liabilities and Shareholders' Equity $62,460 $51,300 CONSULTEX COMPANY Income Statement For the Year Ended October 31 2017 2016 Sales Revenue $146,000 $149,600 Wages Expense 90,520 89,760 Rent Expense 19,500 13,500 Other Operating Expenses 27,900 28,700 Income before Income Tax Expense Income Tax Expense 8,080 2,420 17,640 5,290 Net Income $ 5,660 $ 12,350 Required: 1. Prepare a properly formatted statement of cash flows for Consultex for the year ended October 31, 2017 (using the indirect method). (Amounts to be deducted should be indicated by a minus sign.) CONSULTEX COMPANY Statement of Cash Flows For the Year Ended October 31, 2017 Cash flows from operating activities Net income Changes in current assets and current liabilities Accounts receivable Prepaid rent Wages payable 0 Cash provided by operating activities Cash flows from investing activities Purchased land 0 Cash used in investing activities Cash flows from financing activities Repaid promissory note principal Paid cash dividends Repurchased company shares Issued new note Issued new company shares 0 Cash provided by financing activities Net change in cash Beginning cash position, October 31, 2016 Ending cash position, October 31, 2017 $ 0
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started