S SERIAL PROBLEM. KATE'S CARDS This is a continuation of the Serial Problem: Kate's Cards from Chapter 7 through Chapter 1 k ate has just completed her first vear running Kate's Cards. She has been preparing monthly statements and balance sheets, so she knows that her company has been profitable and that cash in the bank. She has not, however, prepared a statement of cash flows, Kate provides y the year-end income statement and balance sheet and asks that you prepare a statement of cash for Kate's Cards Additional information: a monthly income le and that there is Kate provides you with 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, 2019, using the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance sheet account balances were zero. Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, usin the direct method. (Appendix 12A) KATE'S CARDS Income Statement Year Ended August 31, 2019 $185,000 106,000 79,000 Sales revenue. Cost of goods sold ... Gross proll Operating expenses Wages. Consulting Insurance ities. . 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 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 $17,400 11,000 16,000 1,000 45,400 17,500 (3,250) $59,650 $ 6,200 1,250 1,900 9,350 15,000 24,350 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. 500 9,500 5,000 20,300 35,300 $59,650