Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $16,500 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,100 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 $5,100 by signing a new promissory note in May and also issued stock to a new private investor for $12,100 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2018 2017 Assets Cash $ 9,850 $13,300 14,200 2,050 27,500 12,100 3,100 11,000 Accounts Receivable Prepaid Rent Land Total Assets $53,600 $39,500 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) $ 2,050 $ 3,100 1,100 12,100 9,100 14,100 1,100 15,200 20,100 Common Stock Retained Earnings 15,150 Total Liabilities and Stockholders' Equity $53,600 $39,500 CONSULTEX, INC. Income Statement For the Year Ended October 31 2017 $158,500 $161,500 97,100 30,100 20,100 14,200 4,260 9,940 2018 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense 98,100 36,100 19,800 4,500 1,350 $ 3,150 $ Net Income

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Chapter1: Financial Statements And Business Decisions
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Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017
but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $16,500 to purchase land and repaid $2,000
principal on an existing promissory note. In March, the company paid $2,100 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 $5,100 by signing a new
promissory note in May and also issued stock to a new private investor for $12,100 cash. Year-end comparative balance sheets and
income statements are presented below.
CONSULTEX, INc.
Balance Sheet
October 31
2018
2017
Assets
Cash
$ 9,850 $13,300
12,100
3,100
11,000
$53,600 $39,500
Accounts Receivable
14,200
2,050
Prepaid Rent
Land
et al
27,500
Total Assets
Liabilities and Stockholders' Equity
Salaries and Wages Payable
Income Taxes Payable
Notes Payable (long-term)
$ 2,050 $ 3,100
1,100
15,200
20,100
1,100
12,100
9,100
Common Stock
Retained Earnings
15,150
14,100
Total Liabilities and Stockholders' Equity
$53,600 $39,500
CONSULTEX, INC.
Income Statement
For the Year Ended October 31
2017
$158,500 $161,500
97,100
2018
Sales Revenue
Salaries and Wages Expense
Rent Expense
Utilities Expenses
98,100
30,100
20,100
14,200
36,100
19,800
Income before Income Tax Expense
Income Tax Expense
4,500
1,350
3,150 $ 9,940
4,260
Net Income
Transcribed Image Text:Consultex, Inc., was founded in 2015 as a small financial consulting business. The company had done reasonably well in 2015-2017 but started noticing its cash dwindle early in 2018. In January 2018, Consultex had paid $16,500 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,100 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 $5,100 by signing a new promissory note in May and also issued stock to a new private investor for $12,100 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INc. Balance Sheet October 31 2018 2017 Assets Cash $ 9,850 $13,300 12,100 3,100 11,000 $53,600 $39,500 Accounts Receivable 14,200 2,050 Prepaid Rent Land et al 27,500 Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) $ 2,050 $ 3,100 1,100 15,200 20,100 1,100 12,100 9,100 Common Stock Retained Earnings 15,150 14,100 Total Liabilities and Stockholders' Equity $53,600 $39,500 CONSULTEX, INC. Income Statement For the Year Ended October 31 2017 $158,500 $161,500 97,100 2018 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses 98,100 30,100 20,100 14,200 36,100 19,800 Income before Income Tax Expense Income Tax Expense 4,500 1,350 3,150 $ 9,940 4,260 Net Income
1. Prepare a properly formatted Statement of Cash Flows for Consultex, Ic., for the year ended October 31, 2018 (using the indirect
method). (Amounts to be deducted should be indicated with a minus sign.)
CONSULTEX, INC.
Statement of Cash Flows
For the Year Ended October 31, 2018
Cash Flows from Operating Activities:
Changes in Current Assets and Current Liabilities
Cash Flows from Investing Activities:
Cash Flows from Financing Activities:
Transcribed Image Text:1. Prepare a properly formatted Statement of Cash Flows for Consultex, Ic., for the year ended October 31, 2018 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.) CONSULTEX, INC. Statement of Cash Flows For the Year Ended October 31, 2018 Cash Flows from Operating Activities: Changes in Current Assets and Current Liabilities Cash Flows from Investing Activities: Cash Flows from Financing Activities:
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