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. Current Year Previous Year Balance Sheet at December 31 Cash $ 6,180 $ 4,160 Accounts Receivable 890 1,730 Equipment 5,390 4,900 Accumulated Depreciation—Equipment (1,480) (1,240) Total Assets $ 10,980 $ 9,550 Accounts Payable $ 710 $ 1,200 Salaries and Wages Payable 510 750 Notes Payable (long-term) 1,600 500 Common Stock 4,900 4,900 Retained Earnings 3,260 2,200 Total Liabilities and Stockholders’ Equity $ 10,980 $ 9,550 Income Statement Service Revenue $ 39,700 Salaries and Wages Expense 37,200 Depreciation Expense 240 Income Tax Expense 1,200 Net Income $ 1,060 Additional Data: Bought new hockey equipment for cash, $490. Borrowed $1,100 cash from the bank during the year. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume this expense was fully paid in cash. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method.
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. Current Year Previous Year Balance Sheet at December 31 Cash $ 6,180 $ 4,160 Accounts Receivable 890 1,730 Equipment 5,390 4,900 Accumulated Depreciation—Equipment (1,480) (1,240) Total Assets $ 10,980 $ 9,550 Accounts Payable $ 710 $ 1,200 Salaries and Wages Payable 510 750 Notes Payable (long-term) 1,600 500 Common Stock 4,900 4,900 Retained Earnings 3,260 2,200 Total Liabilities and Stockholders’ Equity $ 10,980 $ 9,550 Income Statement Service Revenue $ 39,700 Salaries and Wages Expense 37,200 Depreciation Expense 240 Income Tax Expense 1,200 Net Income $ 1,060 Additional Data: Bought new hockey equipment for cash, $490. Borrowed $1,100 cash from the bank during the year. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume this expense was fully paid in cash. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 14M
Related questions
Topic Video
Question
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.
| Current Year | Previous Year | |
|---|---|---|
| Cash | $ 6,180 | $ 4,160 |
| 890 | 1,730 | |
| Equipment | 5,390 | 4,900 |
| (1,480) | (1,240) | |
| Total Assets | $ 10,980 | $ 9,550 |
| Accounts Payable | $ 710 | $ 1,200 |
| Salaries and Wages Payable | 510 | 750 |
| Notes Payable (long-term) | 1,600 | 500 |
| Common Stock | 4,900 | 4,900 |
| 3,260 | 2,200 | |
| Total Liabilities and |
$ 10,980 | $ 9,550 |
| Income Statement | ||
| Service Revenue | $ 39,700 | |
| Salaries and Wages Expense | 37,200 | |
| Depreciation Expense | 240 | |
| Income Tax Expense | 1,200 | |
| Net Income | $ 1,060 |
Additional Data:
- Bought new hockey equipment for cash, $490.
- Borrowed $1,100 cash from the bank during the year.
- Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume this expense was fully paid in cash.
Required:
1. Prepare the statement of
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,