Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year $ 6,180 940 5,940 (1.580) $11,480 $ $38.300 35,800 Previous Year 560 $ 1,100 460 1,500 5,400 3,560 $11.480 200 1,100 $ 1,110 $ 4,260 1,830 5,400 (1,290) $10,200 750 500 5,400 2,450 $10,200 Additional Data: a. Bought new hockey equipment for cash, $540 b. Borrowed $1.000 cash from the bank during the year 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 was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year $ 6,180 940 5,940 (1.580) $11,480 $ $38.300 35,800 Previous Year 560 $ 1,100 460 1,500 5,400 3,560 $11.480 200 1,100 $ 1,110 $ 4,260 1,830 5,400 (1,290) $10,200 750 500 5,400 2,450 $10,200 Additional Data: a. Bought new hockey equipment for cash, $540 b. Borrowed $1.000 cash from the bank during the year 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Heads Up Company was started several years ago by two hockey instructors. The company's comparative
balance sheets and income statement follow, along with additional information.
Balance Sheet at December 31
Cash
Accounts Receivable
Equipment
Accumulated Depreciation-Equipment
Accounts Payable
Salaries and Wages Payable
Note Payable (long-term)
Common Stock
Retained Earnings
Income Statement
Service Revenue
Salaries and Wages Expense
Depreciation Expense
Income Tax Expense
Net Income
Current
Year
$ 6,180
940
Cash Flows from Operating Activities:
$ 560
460
5,940
5,400
(1.580)
(1.290)
$11,480 $10,200
1,500
5,400
3,560
$11.480
$38.300
35,800
Previous
Year
290
1.100
$ 1,110
$ 4,260
1,830
$ 1,100
750
500
5,400
2,450
$10,200
Additional Data:
a. Bought new hockey equipment for cash, $540
b. Borrowed $1.000 cash from the bank during the year.
o. 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
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