comparative Dive In Company was started several years ago by two diving instruct
ID: 2432502 • Letter: C
Question
comparative Dive In Company was started several years ago by two diving instructors. The company's balance sheets and income statement are presented revious Balance Sheet at December 31 Cash Accounts Receivable Prepaid Expenses $ 4,880$5,740 2,200 1.100 110 $ 7.300 $6,950 Common Stock Retained Earnings 2 Salaries and Wages Payable S 950 $2 300 2,400 1,600 3950 3050 $ 7,300 $6.950 Income Statement $47.150 Salaries and Wages Expense42.000 4,250 Service Revenue Other Operating Expenses Net Income $ 900 Additional Data a Prepaid Expenses relate to rent paid in advance b Other Operating Expenses were paid in cash c An owner contributed capital by paying $800 cash in exchange for the company's stock Re Plirpade ho satemn f . Pepao the statement of cash os fo tho curent year anded Decomber 31 using the indirect method curment yoar ended Decomber 31 using th (Amounts to be deducted should be indicated by a minus sign.)Explanation / Answer
Dive in company
statement of cash flows
for the year ended december 31
particular. amount $. amount $
cash. flow from operating activities
net income 900
adjustments to reconcile net income
to net cash provided by operating
activities
increase in account receivables -1100
1100 - 2200
increase in prepaid expenses -110
110 -220
decrease in salaries and wages. -1350
2300 -950
cash flow used in operating activities. -1660
cash flow from investing activies
NILL nill
cash flow from investing activities . nill
cash flow from financing activities
issues of common stock 800
2400- 1600
cash flow from financing activities. 800
cash and cash equivalent during
the year (-1660+800 -860
cash and equivalent at the beginning 5740
cash and cash at the end (5740-860 4880
Notes
1) current asset increase then cash will decreases
Current asset decrease then cash will increase
Current liabilities increase then cash will increase
Current liabilities decrease then cash will decrease
2) It records all transactions in cash in cash flow statement whether related to previous year , current year , following year
Examples additional information above A ,B and C
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