Free

80.2K

Verified Solution

Link Copied!

XS Supply Company is developing its annual financial statementsat December 31. The statements are complete except for thestatement of cash flows. The completed comparative balance sheetsand income statement are summarized:

	Current Year					Previous Year
Balance Sheet atDecember 31
Cash		$	32,570				$	27,500
Accounts Receivable			33,600					27,300
Inventory			39,600					37,300
Equipment			110,500					93,000
AccumulatedDepreciation—Equipment			(28,600	)				(24,300	)
		$	187,670				$	160,800
Accounts Payable		$	34,600				$	26,300
Salaries and Wages Payable			1,170					1,300
Note Payable (long-term)			31,700					37,000
Common Stock			84,400					71,900
Retained Earnings			35,800					24,300
		$	187,670				$	160,800
Income Statement
Sales Revenue		$	113,000
Cost of Goods Sold			66,500
Other Expenses			35,000
Net Income		$	11,500

Additional Data:
a.	Bought equipment for cash, $17,500.
b.	Paid $5,300 on the long-term note payable.
c.	Issued new shares of stock for $12,500 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $4,300; Salaries andwages, $19,300; taxes, $5,300; utilities, $6,100.
f.	Accounts Payable includes only inventory purchases made oncredit. Because there are no liability accounts relating to taxesor other expenses, assume that these expenses were fully paid incash.

Required:
1.	Prepare the statement of cash flows for the current year endedDecember 31 using the indirect method. (Amounts to bededucted should be indicated with a minus sign.)