XS Supply Company is developing its annual financial statements at December 31.
ID: 2393234 • Letter: X
Question
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:
e. Other expenses included depreciation, $5,700; Salaries and wages, $20,700; taxes, $6,700; utilities, $7,500.
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.
Current Year Previous Year Balance Sheet at December 31 Cash $ 35,230 $ 30,300 Accounts Receivable 36,400 28,700 Inventory 42,400 38,700 Equipment 131,500 107,000 Accumulated Depreciation—Equipment (31,400 ) (25,700 ) $ 214,130 $ 179,000 Accounts Payable $ 37,400 $ 27,700 Salaries and Wages Payable 1,030 1,300 Note Payable (long-term) 44,300 51,000 Common Stock 92,800 73,300 Retained Earnings 38,600 25,700 $ 214,130 $ 179,000 Income Statement Sales Revenue $ 127,000 Cost of Goods Sold 73,500 Other Expenses 40,600 Net Income $ 12,900 Additional Data: a. Bought equipment for cash, $24,500. b. Paid $6,700 on the long-term note payable. c. Issued new shares of stock for $19,500 cash. d. No dividends were declared or paid.e. Other expenses included depreciation, $5,700; Salaries and wages, $20,700; taxes, $6,700; utilities, $7,500.
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 Cash Flows from Investing Activities: Cash Flows from Financing Activities:
Explanation / Answer
Statement of Cash Flows - Indirect Method Amount in $ Amount in $ Net income $ 12,900 Cash flows from operating activities Adjustments for: Depreciation $ 5,700 (Increase) / Decrease in Account receivables $ -7,700 Inventory Decrease / (Increase) $ -3,700 Accounts payable Increase / ( Decrese) $ 9,700 Wages Payable $ -270 $ 3,730 Net cash from operating activities $ 16,630 Cash flows from investing activities Purhcase of Equipment $ -24,500 Net cash used in investing activities $ -24,500 Cash flows from Financing activities Issue of Common Stock $ 19,500 Note Payable $ -6,700 Net cash used in financing activities $ 12,800 Net increase in cash and cash equivalents $ 4,930 Add :Cash and cash equivalents at beginning of period $ 30,300 Cash and cash equivalents at end of period $ 35,230
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