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Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets $ 6,300 900 5,500 (1,500) $ 4,000 1,750 5,000 (1,250) $ 11,200 $ 9,500 Accounts Payable $ 500 $ 1,000 Common Stock Salaries and Wages Payable Notes Payable (long-term) Retained Earnings 500 750 1,700 500 5,000 5,000 3,500 2,250 Total Liabilities and Stockholders' $ 11,200 $ 9,500 Equity Income Statement Service Revenue $ 37,500 35,000 Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $500. b. Borrowed $1,200 cash from the bank during the year. 250 1,000 $ 1,250 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the direct method. (Amounts to be deducted should be indicated with a minus sign.) HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Cash Paid for Income Tax Cash Paid for Salaries and Wages to Employees Cash Paid for Other Operating Expenses Net Cash Provided by Operating Activities 0 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 0 4,000 $ 4,000

Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets $ 6,300 900 5,500 (1,500) $ 4,000 1,750 5,000 (1,250) $ 11,200 $ 9,500 Accounts Payable $ 500 $ 1,000 Common Stock Salaries and Wages Payable Notes Payable (long-term) Retained Earnings 500 750 1,700 500 5,000 5,000 3,500 2,250 Total Liabilities and Stockholders' $ 11,200 $ 9,500 Equity Income Statement Service Revenue $ 37,500 35,000 Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $500. b. Borrowed $1,200 cash from the bank during the year. 250 1,000 $ 1,250 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the direct method. (Amounts to be deducted should be indicated with a minus sign.) HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Cash Paid for Income Tax Cash Paid for Salaries and Wages to Employees Cash Paid for Other Operating Expenses Net Cash Provided by Operating Activities 0 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 0 4,000 $ 4,000

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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Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets $ 6,300 900 5,500 (1,500) $ 4,000 1,750 5,000 (1,250) $ 11,200 $ 9,500 Accounts Payable $ 500 $ 1,000 Common Stock Salaries and Wages Payable Notes Payable (long-term) Retained Earnings 500 750 1,700 500 5,000 5,000 3,500 2,250 Total Liabilities and Stockholders' $ 11,200 $ 9,500 Equity Income Statement Service Revenue $ 37,500 35,000 Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $500. b. Borrowed $1,200 cash from the bank during the year. 250 1,000 $ 1,250 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the direct method. (Amounts to be deducted should be indicated with a minus sign.) HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Cash Paid for Income Tax Cash Paid for Salaries and Wages to Employees Cash Paid for Other Operating Expenses Net Cash Provided by Operating Activities 0 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 0 4,000 $ 4,000
Transcribed Image Text:Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets $ 6,300 900 5,500 (1,500) $ 4,000 1,750 5,000 (1,250) $ 11,200 $ 9,500 Accounts Payable $ 500 $ 1,000 Common Stock Salaries and Wages Payable Notes Payable (long-term) Retained Earnings 500 750 1,700 500 5,000 5,000 3,500 2,250 Total Liabilities and Stockholders' $ 11,200 $ 9,500 Equity Income Statement Service Revenue $ 37,500 35,000 Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $500. b. Borrowed $1,200 cash from the bank during the year. 250 1,000 $ 1,250 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the direct method. (Amounts to be deducted should be indicated with a minus sign.) HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Cash Paid for Income Tax Cash Paid for Salaries and Wages to Employees Cash Paid for Other Operating Expenses Net Cash Provided by Operating Activities 0 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 0 4,000 $ 4,000
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