Needing additional help with preparing statement of cash flows below Thanks for

Question

Needing additional help with preparing statement of cash flows below

Thanks for the help!

Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation E $ 6,260 $3,920 1,710 4,800 (1,460 (1,230) 880 5,280 Equipment $10,960 $9,200 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 520 $1,000 750 500 4,800 3,420 2,150 520 1,700 4,800 $10,960 $9,200 Income Statement $39,900 37,400 230 1,000 Service Revenue Salaries and Wages Expense Depreciation Expense nco me Tax Expense Net Income $ 1,270 Additional Data a. Bought new hockey equipment for cash, $480 b. Borrowed $1,200 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 this expense was fully paid in cash

Explanation / Answer

cash flow from operating activities

net income                              1270

+ income tax                            1000

+ depreciation                           230

cash from operations             2500

+ decrease in B/R                  830

- DECREASE IN B/P               480

- DECREASE IN WAGES        230

PAYABLE

- TAX PAID                           1000

CASH FLOW FROM

OPERATIONS                                                                                  1620

CASH FLOW FROM OPERATING ACTIVITIES

- PURCHASE OF HOCKEY EQUPMENT                                         - 480

CASH FLOW FROM FINANCING ACTIVITIES                   

+ BORROW FROM BANK                                                                 1200

CASH INFLOW DURING THE YEAR                                                  2340

OPENNING BALANCE                                                                        3920

CLOSING BALANCE OF CASH                                                         6260

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