Suppose your company sells services of $270 in exchange for $155 cash and $115 on account. Required: 1. Prepare the journal entry to record this transaction. 2. Identify the amount that should be reported as net cash flow from operating activities. 3. Identify the amount that would be included in net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Prepare the journal entry to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Previous Year Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income $ 33,300 34,000 40,000 113,500 (29,000) $191,800 $ 35,000 1,500 33,500 85,600 36,200 $191,800 $ 28, 250 27,500 37,500 95,000 (24,500) $ 163,750 $ 26,500 1,650 39,000 72,100 24,500 $163,750 $115,000 67,500 35,800 $ 11,700 Additional Data: a. Bought equipment for cash, $18,500. b. Paid $5,500 on the long-term note payable. c. Issued new shares of stock for $13,500 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $4,500; salaries and wages, $19,500; taxes, $5,500; utilities, $6,300. f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash. 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 sign.) XS SUPPLY 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: Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Current Year Previous Year $ 6,260 880 Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income 5,280 (1,460) $10,960 $ 520 520 1,700 4,800 3,420 $ 10,960 $ 3,920 1,710 4,800 (1,230) $ 9,200 $ 1,000 750 500 4,800 2,150 $ 9,200 $39,900 37,400 230 1,000 $ 1,270 Additional Data: a. Bought new hockey equipment for cash, $480. b. Borrowed $1,200 cash from the bank during the year. c. 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. 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 sign.) 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