XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the statement of cash flows the

Question

92 users unlocked this solution today!

XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the statement of cash flows the complete comparative balance sheets and income statement are summarized:

Additional Data:
a. Bought equipment for cash. $31,000.
Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.
b. Paid $6,000 on the long-term note payable.
c. Issued new shares of stock for $16,000 cash.
d. No dividends were declared or paid.
e. Other expenses included depreciation, $12,000; wages, SI 3,000; taxes, S6,000; and other, $7.800.
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 year ended December 31, 2014, using the indirect method.
2. Evaluate the statement of cashflows.

2014 2013 Balance sheet at December 31 S 29,000 28,000 38.000 100,000 (25,000) S170,000 S 34,000 35,000 41,000 121,000 (30,000) $201,000 S 36,000 1,200 38,000 88,600 37,200 $201,000 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Contributed capital Retained earnings S 27,000 1,400 44.000 72,600 25.000 S170.000 Income statement for 2014 Sales Gain on sale of equipment Cost of goods sold Other expenses Net income $120,000 1,000 70,000 38,800 S 12.200