Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and incom statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year Previous Year $ 6,140 820 4,620 (1,340) $ 10,240 $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 170 1,000 $ 1,330 $ 3,680 1,590 4,200 (1,170) $ 8,300 $ 1,000 750 500 4,200 1,850 $ 8,300 Additional Data: . Bought new hockey equipment for cash, $420. b. Borrowed $1,200 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: . Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted hould 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 incom statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year Previous Year $ 6,140 820 4,620 (1,340) $ 10,240 $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 170 1,000 $ 1,330 $ 3,680 1,590 4,200 (1,170) $ 8,300 $ 1,000 750 500 4,200 1,850 $ 8,300 Additional Data: . Bought new hockey equipment for cash, $420. b. Borrowed $1,200 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: . Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted hould 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
Total Assets
Accounts Payable
Salaries and Wages Payable
Notes Payable (long-term)
Common Stock
Retained Earnings
Total Liabilities and Stockholders' Equity
Income Statement
Service Revenue
Salaries and Wages Expense
Depreciation Expense
Income Tax Expense
Net Income
Additional Data:
a. Bought new hockey equipment for cash, $420.
b. Borrowed $1,200 cash from the bank during the year.
HEADS UP COMPANY
Statement of Cash Flows
For the Year Ended December 31
Cash Flows from Operating Activities:
Net Income
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Changes in Current Assets and Current Liabilities
Current Year
Cash Flows from Investing Activities:
$ 6,140
820
4,620
(1,340)
$ 10,240
Cash Flows from Financing Activities:
$ 580
580
1,700
4,200
3,180
$ 10,240
$ 41,100
38,600
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.
170
1,000
$ 1,330
Required:
1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted
should be indicated with a minus sign.)
$ 2,330
$
2,330
0
Previous Year
0
$ 3,680
1,590
4,200
(1,170)
$ 8,300
$1,000
750
500
0
4,200
1,850
$ 8,300
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