Shallow Waters Company was started several years ago by two điving instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Current Balance Sheet at December 31 Year Prior Year Cash $ 4,000 1,300 Accounts receivable $ 4,500 800 Prepaid expenses Equipment 100 250 700 $ 6,100 $ 5,550 Wages payable Common stock and additional paid -in capital Retained earnings $4 650 1,700 3,750 $ 1,100 1,400 3,050 $ 6,100 $ 5,550 Income Statement for Current Year Lessons revenue Wages expense Other expenses $34,550 30, 200 3,650 Net income 24 700 Additional Data. a. Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash. c. Purchased equipment for $700 cash at the end of the current year to be used starting in following year. d. An owner contributed capital by paying $300 cash in exchange for the company's stock. Required: Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)

Shallow Waters Company was started several years ago by two điving instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Current Balance Sheet at December 31 Year Prior Year Cash $ 4,000 1,300 Accounts receivable $ 4,500 800 Prepaid expenses Equipment 100 250 700 $ 6,100 $ 5,550 Wages payable Common stock and additional paid -in capital Retained earnings $4 650 1,700 3,750 $ 1,100 1,400 3,050 $ 6,100 $ 5,550 Income Statement for Current Year Lessons revenue Wages expense Other expenses $34,550 30, 200 3,650 Net income 24 700 Additional Data. a. Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash. c. Purchased equipment for $700 cash at the end of the current year to be used starting in following year. d. An owner contributed capital by paying $300 cash in exchange for the company's stock. Required: Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)

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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