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 $ 34,960 $ 30,000 Accounts Receivable 35,800 28,400 Inventory 41,800 38,400 Equipment 127,000 104,000 Accumulated Depreciation Equipment (30,800) (25,400) Total Assets $ 288,760 $ 175,400 Accounts Payable $ 36,800 $ 27,400 Salaries and Wages Payable 1,360 1,600 Notes Payable (long-term) 41,600 48,000 Common Stock 91,000 73,000 Retained Earnings 38,000 25,400 Total Liabilities and Stockholders' Equity $ 208,760 $ 175,400 Income Statement Service Revenue $ 124,000 Cost of Goods Sold 72,000 Other Expenses 39,400 Net Income $ 12,600 Additional Data: a. Bought equipment for cash, $23,000. b Paid $6,400 on the long-term notes payable. c Issued new shares of stock for $18,000 cash d. No dividends were declared or paid. e Other expenses included depreciation, $5,400; salaries and wages, $20,400; taxes, $6,400; utilities, $7,200 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 client 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: Net Income Adjustments to Reconcle Net Income to Net Cash Provided by Operating Activities Depreciation Expense Changes in Current Assets and Current Liabilities a. Bought equipment for cash, $23,000. b. Paid $6,400 on the long-term notes payable. c. Issued new shares of stock for $18,000 cash. d. No dividends were declared or pald. e. Other expenses included depreciation, $5,400; salaries and wages, $20,400; taxes, $6,400; utilities, $7,200. 1. 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 Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Depreciation Expense Changes in Current Assets and Current Liabilities Decrease in Accounts Receiveable Decrease in Accounts Payable Increase in Inventory Decrease in Salaries and Wages payablo 0 0 Net Cash Used in Operating Activities Cash Flows from investing Activities 0 Cash Flows from Financing Activities: 0 $ 0
