3. Computer \'comparative balance sheets andi ears ago by two college roommates.

Question

3. Computer 'comparative balance sheets andi ears ago by two college roommates. The ddditional information compauter Service and Repair was started fue income statement are presented below, along Dan Current Year Prior Year Balance Sheet at December 31 Cash Accounts receivab Prepaid expenses Equipment Accmulated depreciation 3,250 4,000 500 50 700 100 350 50 0 $ 4,350 4,550 $ 1,100 Wages payable Short-term note payable Common stock Retained earnings $ 350 250 1,000 2,750 1,000 2,450 4,550 4,35055 Income Statement for Current Year Service revenue Depreciation expense Salaries expense Other expenses Net income $34,000 50 30,000 3,650 $ 300 Additional Data: a. Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash. c Purchased equipment for $350 cash at the beginning of the current year and recorded $50 of depreciation expense at the end of the current year. d. At the end of the current year, the company signed a shor-term note payable to the bank for $250 Required: indirect Reqara the statement of cash flows for the year ended December 31, current year, using the Prepart method. (List cash outflows as negative amounts.)

Explanation / Answer

Solution:

Cash flow Statement- Computer Service & Repair Particulars Details Amount Cash Flow from Operating Activities: Net Income $300.00 Adjustments to reconcile net income to cash flow from operating activities: Depreciation $50.00 Increase in Accounts Receivables ($700 - $500) -$200.00 Increase in Prepaid Expense ($100 - $50) -$50.00 Decrease in Wages Payable ($1,100 - $350) -$750.00 Total Adjustments -$950.00 Net Cash Flow From Operating Activites (A) -$650.00 Cash Flow from Investing Activities: Purchase of Equipment -$350.00 Net Cash Flow From Investing Activites (B) -$350.00 Cash Flow from Financing Activities: Short term financing from bank $250.00 Net Cash Flow From Financing Activites (C) $250.00 Total Cash flow from all activities (A+B+C) -$750.00 Cash at the beginning of the year $4,000.00 Cash at the end of year $3,250.00

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.