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x Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, along
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Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipme Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockhol Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: Current Year Previous Year \begin{tabular}{rrr} \hline 14,580 & $9,750 \\ 3,000 & 4,200 \\ 12,100 & 11,000 \\ (3,770) & (3,200) \\ \hline \hline$25,910 & $21,750 \\ \hline$1,700 & $2,700 \\ 1,280 & 1,850 \\ 3,700 & 1,000 \\ 11,000 & 11,000 \\ 8,230 & 5,200 \\ \hline quity 25,910 & $21,750 \\ \hline \hline$77,800 & \\ 71,500 & \\ 52,700 & \\ \hline$3,030 & \\ \hline \hline \end{tabular} NotesPayable(long-term)CommonStockRetainedEarningsTotalLiabilitiesandStockholdersEquityIncomeStatementServiceRevenueSalariesandWagesExpenseDepreciationExpenseIncomeTaxExpenseNetIncome3,70011,0008,230$25,910$77,80071,5005702,700$3,0301,00011,0085,200$21,758 a. Bought new golf clubs using cash, $1,100. b. Borrowed $2,700 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 Income Tax Expense was fully paid in cash. 1. Prepare the statement of cash flows for the current year kequirea: ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) SOFT TOUCH 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: Check Cash Flows from Investing Activities Step by Step Solution
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