Prepare a Statement of Cash Flow for Hayley's Hurdle Company for $2023$ using the direct method.

Also prepare a reconciliation of Net Income to Cash Flow from Operating Activities $($indirect method$).$

Hayley's Hurdle Company

Balance Sheet

As of December $31$

Assets $20232022$

Cash $8,5002,200$

Accounts Receivable $2,0002,500$

Inventory $10,0006,000$

Prepaid Rent $150300$

PPE $25,00015,000$

Accumulated Dep $(4,500)(5,000)$

Total Assets $41,15021,000$

Liabilities and Equity

Accounts Payable $2,5001,100$

Interest Payable $100-$

Unearned Rent Revenue $1,500600$

Taxes Payable $1,000800$

Note Payable $-$ Equipment $5,000-$

Common Stock $16,00013,300$

Retained Earnings $15,0505,200$

Total Liabilities and Equity $41,15021,000$

Hayley's Hurdle Company

Income Statement

For the Year Ending December $31,2023$

Sales Revenue $30,000$

Cost of Goods Sold $(9,500)$

Gross Profit $20,500$

Rent Expense $(2,000)$

Salaries and Other Expenses $(5,000)$

Depreciation $(3,000)$

Total Operating Expenses $(10,000)$

Operating Income $10,500$

Rent Revenue $2,500$

Gain on Sale $2,000$

Interest Expense $(200)$

Income before taxes $14,800$

Tax Expense $(2,500)$

Net Income $12,300$

Additional Information

$1)$ During the year, Hayley purchased equipment. Part of the equipment was paid for in cash.

The remaining part of the equipment was financed. The amount financed is in Note Payable $-$ Equipment.

$2)$ Equipment with a book value of $$500$ was sold during the year.

$3)$ All purchases and sales of inventory were on account.

Lizzy's Laundry Repair, Inc.

Balance Sheet

As of December $31$

Assets $20232022$

Cash $20,500137,000$

Accounts Receivable $212,000122,000$

Inventory $197,000242,000$

Long$-$Term Investments $-77,000$

Total Assets $429,500578,000$

Lizzy's Laundry Repair, Inc.

Statement of Cash Flows

For the Year Ending December $31,2023$

Operating Activities

Cash collected from customers $503,000$

Cash paid for inventory $(398,800)$

Cash paid for operating expenses $(188,000)$

Cash Flow $-$ Operating Activities $(83,800)$

Lizzy's Laundry Repair, Inc.

Reconciliation of Net Income to Cash Flow $-$ Operating

For the Year Ending December $31,2023$

Net Income $(5,200)$

Loss on sale of investment $9,200$

Increase in Accounts Receivable $(90,000)$

Decrease in Inventory $45,000$

Decrease in Accounts Payable $(51,800)$