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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

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 $ 35,650 $ 30,750
Accounts Receivable 37,000 29,000
Inventory 43,000 39,000
Equipment 136,000 110,000
Accumulated DepreciationEquipment (32,000 ) (26,000 )
Total Assets $ 219,650 $ 182,750
Accounts Payable $ 38,000 $ 28,000
Salaries and Wages Payable 850 1,150
Note Payable (long-term) 47,000 54,000
Common Stock 94,600 73,600
Retained Earnings 39,200 26,000
Total Liabilities and Stockholders Equity $ 219,650 $ 182,750
Income Statement
Sales Revenue $ 130,000
Cost of Goods Sold 75,000
Other Expenses 41,800
Net Income $ 13,200

Additional Data:

  1. Bought equipment for cash, $26,000.
  2. Paid $7,000 on the long-term note payable.
  3. Issued new shares of stock for $21,000 cash.
  4. No dividends were declared or paid.
  5. Other expenses included depreciation, $6,000; salaries and wages, $21,000; taxes, $7,000; utilities, $7,800.
  6. 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.)

image text in transcribed

A 13,200 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: Increase in Accounts Receivable Increase in Inventory Increase in Accounts Payable Decrease in Salaries and Wages Payable $ 8,000 8,000 19,200 Net Cash Provided by Operating Activities Cash Flows from Investing Activities Cash Payments to Purchase Equipment 0 Cash Flows from Financing Activities: Cash Payments on Notes Payable long-term) Cash Receipts from Issuing Stock 0 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 A 0

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