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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, $570. b. Borrowed $1,000 cash from the bank during the year. Current Year Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 6,240 978 6,270 (1,640) $ 11,848 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 $ 1,100 750 500 5,700 2,600 $ 10,650 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 indirect 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 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, $570. b. Borrowed $1,000 cash from the bank during the year. Current Year Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 6,240 978 6,270 (1,640) $ 11,848 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 $ 1,100 750 500 5,700 2,600 $ 10,650 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 indirect method. (Amounts to be deducted should be indicated with a minus sign.)

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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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. Current Year $ 6,240 978 6,270 (1,640) $ 11,840 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 1,100 750 500 5,700 2,600 $ 10,650 Additional Data: a. Bought new hockey equipment for cash, $570. 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 indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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. Current Year $ 6,240 978 6,270 (1,640) $ 11,840 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 1,100 750 500 5,700 2,600 $ 10,650 Additional Data: a. Bought new hockey equipment for cash, $570. 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 indirect 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 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 $ 6,240 978 6,270 (1,640) $ 11,840 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 1,100 750 500 5,700 2,600 $ 10,650 Additional Data: a. Bought new hockey equipment for cash, $570. 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 indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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. Current Year $ 6,240 978 6,270 (1,640) $ 11,840 $ 530 430 1,500 5,700 3,680 $ 11,840 $ 38,900 36,400 320 1,100 $ 1,080 Previous Year $ 4,380 1,890 5,700 (1,320) $ 10,650 $ 1,100 750 500 5,700 2,600 $ 10,650 Additional Data: a. Bought new hockey equipment for cash, $570. 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 indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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