and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 $ 11,900 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2020 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)
and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end comparative balance sheets and income statements are presented below. Assets Cash Accounts Receivable Prepaid Rent Land Total Assets CONSULTEX, INCORPORATED Balance Sheet October 31 Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income 2021 $ 8,970 $ 11,900 12,800 1,700 24,000 $ 47,470 $ 1,700 1,100 11,800 18,700 14,170 $ 47,470 2020 2021 $ 155,000 97,400 35,400 19,100 3,100 930 $ 2,170 11,400 2,400 11,000 $36,700 $ 2,400 1,100 11,400 8,400 13,400 $36,700 2020 $ 158,000 96,400 29,400 19,400 12,800 3,840 $ 8,960 Required: 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from
2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $13,000 to purchase land
and repaid $4,000 principal on an existing promissory note. In March, the company paid $1,400 cash for dividends and $1,100 to
repurchase and eliminate Consultex stock that had previously been issued for $1,100. To improve its cash position, Consultex
borrowed $4,400 by signing a new promissory note in May and also issued stock to a new private investor for $11,400 cash. Year-end
comparative balance sheets and income statements are presented below.
Assets
Cash
Accounts Receivable
Prepaid Rent
Land
Total Assets
CONSULTEX, INCORPORATED
Balance Sheet
October 31
Liabilities and Stockholders' Equity
Salaries and Wages Payable
Income Taxes Payable
Notes Payable (long-term)
Common Stock
Retained Earnings
Total Liabilities and Stockholders' Equity
CONSULTEX, INCORPORATED
Income Statement
For the Year Ended October 31
Sales Revenue
Salaries and Wages Expense
Rent Expense
Utilities Expenses
Income before Income Tax Expense
Income Tax Expense
Net Income
2021
$ 8,970
12,800
1,700
24,000
$ 47,470
$ 1,700
1,100
11,800
18,700
14,170
$ 47,470
2021
$ 155,000
97,400
35,400
19,100
3,100
930
$ 2,170
2020
$ 11,900
11,400
2,400
11,000
$36,700
$ 2,400
1,100
11,400
8,400
13,400
$36,700
2020
$ 158,000
96,400
29,400
19,400
12,800
3,840
$ 8,960
Required:
1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the
indirect method). (Amounts to be deducted should be indicated with a minus sign.)
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