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and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 $ 11,900 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2020 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)

and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 $ 11,900 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2020 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $13,000 to purchase land and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 2020 $ 11,900 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)
Transcribed Image Text:Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $13,000 to purchase land and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 2020 $ 11,900 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)
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