Question

XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:
Current Year Previous Year
Balance Sheet at December 31
Cash $ 35,370 $ 30,450
Accounts Receivable 36,600 28,800
Inventory 42,600 38,800
Equipment 133,000 108,000
Accumulated Depreciation—Equipment (31,600 ) (25,800 )
Total Assets $ 215,970 $ 180,250
Accounts Payable $ 37,600 $ 27,800
Salaries and Wages Payable 970 1,250
Note Payable (long-term) 45,200 52,000
Common Stock 93,400 73,400
Retained Earnings 38,800 25,800
Total Liabilities and Stockholders’ Equity $ 215,970 $ 180,250
Income Statement
Sales Revenue $ 128,000
Cost of Goods Sold 74,000
Other Expenses 41,000
Net Income $ 13,000
Additional Data:
a. Bought equipment for cash, $25,000. Paid $6,800 on the long-term note payable.
b. Issued new shares of stock for $20,000 cash.
c. No dividends were declared or paid.
Other expenses included depreciation, $5,800; salaries and wages, $20,800; taxes, $6,800; utilities, $7,600.
Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.
Required:
1. Prepare the statement of cash flows for the current year. Using the indirect method.
2. Evaluate the statement of the cash flows.

Answer 1

Answer:

B.) The net cashflow from operating activities stands at $16,720 while that from investing activities was ($25,000) for equipment purchase. The net cash from financing activities is $13,200 giving a total net cash increase of $4920 for the year. With the total cash balance at end totaling $35,370 including the beginning cash balance of $30,450

Explanation:

Kindly check attached picture for detailed statement of cash flow