E12-13 Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative Balance Sheets and Income Statements (LO 12-1, LO 12-2, LO 12-3, LO 12-4, LO 12-5] 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 $15,000 to purchase land and repaid $3,000 principal on an existing promissory note. In March, the company paid $1,800 cash for dividends and $1,000 to repurchase and eliminate Consultex stock that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $4,800 by signing a new promissory note in May and also issued stock to a new private investor for $11,800 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2018 2017 Assets Cash Accounts Receivable Prepaid Rent Land $10,330 $13, 600 13,600 11,8ee 2,800 1,900 25, e00 10,000 $50,830 $38, 200 Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $ 1,900 $ 2,800 1, e00 1, e00 13,600 11,800 19,600 8,800 14,730 13,800 $50,830 $38, 200 CONSULTEX, INC. Income Statement For the Year Ended October 31 2018 2017 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense $157, 000 $16e, e00 96, 800 29, 800 19,800 13,600 4, 08e $ 2,730 $ 9,520 97,800 35,800 19,500 3,900 1,170 Net Income
E12-13 Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative Balance Sheets and Income Statements (LO 12-1, LO 12-2, LO 12-3, LO 12-4, LO 12-5] 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 $15,000 to purchase land and repaid $3,000 principal on an existing promissory note. In March, the company paid $1,800 cash for dividends and $1,000 to repurchase and eliminate Consultex stock that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $4,800 by signing a new promissory note in May and also issued stock to a new private investor for $11,800 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INC. Balance Sheet October 31 2018 2017 Assets Cash Accounts Receivable Prepaid Rent Land $10,330 $13, 600 13,600 11,8ee 2,800 1,900 25, e00 10,000 $50,830 $38, 200 Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity $ 1,900 $ 2,800 1, e00 1, e00 13,600 11,800 19,600 8,800 14,730 13,800 $50,830 $38, 200 CONSULTEX, INC. Income Statement For the Year Ended October 31 2018 2017 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense $157, 000 $16e, e00 96, 800 29, 800 19,800 13,600 4, 08e $ 2,730 $ 9,520 97,800 35,800 19,500 3,900 1,170 Net Income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Requlred:
1. Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended October 31, 2018 (using the
indirect method). (Amounts to be deducted should be Indlcated with a mlnus sign.)
CONSULTEX, INC.
Statement of Cash Flows
For the Year Ended October 31, 2018
Cash Flows from Operating Activities:
Net Income
2,730
Changes in Current Assets and Current Liabilities
Accounts Receivable
(1,800)
Prepaid Rent
900
Salaries and Wages Payable
(900)
930
Cash Flows from Investing Activities:
Purchased Land
(15,000)
(15,000)
Cash Flows from Financing Activities:
Repaid Promissory Note Principal
Paid Cash Dividends
(3,000)
Repurchased Company Common Stock
Issued New Promissory Note
issued New Company Common Stock
Cash Provided by Financing Activities
Net Decrease in Cash
(3,000)
Beginning Cash Position, October 31, 2017
Ending Cash Position, October 31, 2018
![E12-13 Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative
Balance Sheets and Income Statements [LO 12-1, LO 12-2, LO 12-3, LO 12-4, LO 12-5]
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 $15.000 to purchase land and
repaid $3.000 principal on an existing promissory note. In March, the company paid $1.800 cash for dividends and $1,000 to
repurchase and eliminate Consultex stock that had previously been issued for $1.000. To improve its cash position, Consultex
borrowed $4.800 by signing a new promissory note in May and also issued stock to a new private investor for $1,800 cash.
Year-end comparative balance sheets and income statements are presented below.
CONSULTEX, INC.
Balance Sheet
October 31
2018
2017
Assets
Cash
$18,330 $13,600
13,600
Accounts Receivable
Prepaid Rent
Land
11,800
1,900
25,000
2,800
10,000
$50,830 $38, 200
Total Assets
Liabilities and Stockholders' Equity
Salaries and Wages Payable
Income Taxes Payable
Notes Payable (long-term)
$ 1,900 $ 2,800
1,000
1, e0e
13,600
11,800
Common Stock
8,800
14,730 13,800
$50,830 $38, 200
19,600
Retained Earnings
Total Liabilities and Stockholders' Equity
CONSULTEX, INC.
Income Statement
For the Year Ended October 31
2018
2017
Sales Revenue
Salaries and Wages Expense
Rent Expense
Utilities Expenses
Income before Income Tax Expense
Income Tax Expense
$157,000 $160, 000
97,800
96, 80е
35,800
29,800
19, 500
19,800
3,900
13,690
1,170
4,88e
$ 2,730 $ 9,520
Net Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7f57acd-42b9-466e-a85d-4609f38f005a%2F59c45173-9cb0-4a84-a47d-f1458294b036%2Fbzsacwk_processed.png&w=3840&q=75)
Transcribed Image Text:E12-13 Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative
Balance Sheets and Income Statements [LO 12-1, LO 12-2, LO 12-3, LO 12-4, LO 12-5]
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 $15.000 to purchase land and
repaid $3.000 principal on an existing promissory note. In March, the company paid $1.800 cash for dividends and $1,000 to
repurchase and eliminate Consultex stock that had previously been issued for $1.000. To improve its cash position, Consultex
borrowed $4.800 by signing a new promissory note in May and also issued stock to a new private investor for $1,800 cash.
Year-end comparative balance sheets and income statements are presented below.
CONSULTEX, INC.
Balance Sheet
October 31
2018
2017
Assets
Cash
$18,330 $13,600
13,600
Accounts Receivable
Prepaid Rent
Land
11,800
1,900
25,000
2,800
10,000
$50,830 $38, 200
Total Assets
Liabilities and Stockholders' Equity
Salaries and Wages Payable
Income Taxes Payable
Notes Payable (long-term)
$ 1,900 $ 2,800
1,000
1, e0e
13,600
11,800
Common Stock
8,800
14,730 13,800
$50,830 $38, 200
19,600
Retained Earnings
Total Liabilities and Stockholders' Equity
CONSULTEX, INC.
Income Statement
For the Year Ended October 31
2018
2017
Sales Revenue
Salaries and Wages Expense
Rent Expense
Utilities Expenses
Income before Income Tax Expense
Income Tax Expense
$157,000 $160, 000
97,800
96, 80е
35,800
29,800
19, 500
19,800
3,900
13,690
1,170
4,88e
$ 2,730 $ 9,520
Net Income
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