6 Heads Up
Company was started several years ago by twohockey instructors. The
company’s comparative balance sheets andincome
statement follow, along with additional information.
- 6 Heads Up Company Was Started Several Years Ago By Two Hockey Instructors The Company S Comparative Balance Sheets And 1 (35.27 KiB) Viewed 10 times
- 6 Heads Up Company Was Started Several Years Ago By Two Hockey Instructors The Company S Comparative Balance Sheets And 2 (41.27 KiB) Viewed 10 times
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 Loss on Disposal of Equipment Income Tax Expense Net Income Current Year $ 6,060 970 6,340 (1,570) $ 11,800 $ 530 430 1,500 5,700 3,640 $ 11,800 $ 38,900 36,400 570 620 270 $ 1,040 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 equipment for $2,150 cash and sold existing equipment for $570 cash. The equipment that was sold had cost $1,510 and had Accumulated Depreciation of $320 at the time of sale. 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 year ended December 31 using the Indirect 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 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense Loss on Disposal of Equipment Answer is not complete. Changes in Current Assets and Current Liabilities Decrease in Accounts Receivable Decrease in Accounts Payable Decrease in Salaries and Wages Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Cash Proceeds from Disposal of Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Cash Balance, December 31 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 X 570 620 920 (570) (320) (2,150) 570 1,000 S 1,040 2,260 (1,580) 1,000 1,680 4,380 S 6,060