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Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and incom statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year Previous Year $ 6,140 820 4,620 (1,340) $ 10,240 $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 170 1,000 $ 1,330 $ 3,680 1,590 4,200 (1,170) $ 8,300 $ 1,000 750 500 4,200 1,850 $ 8,300 Additional Data: . Bought new hockey equipment for cash, $420. b. Borrowed $1,200 cash from the bank during the year. c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. Required: . Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted hould be indicated with a minus sign.)

Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and incom statement follow, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Current Year Previous Year $ 6,140 820 4,620 (1,340) $ 10,240 $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 170 1,000 $ 1,330 $ 3,680 1,590 4,200 (1,170) $ 8,300 $ 1,000 750 500 4,200 1,850 $ 8,300 Additional Data: . Bought new hockey equipment for cash, $420. b. Borrowed $1,200 cash from the bank during the year. c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. Required: . Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted hould be indicated with a minus sign.)

Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter3: The Basics Of Record Keeping And Financial Statement Preparation: Income Statement
Section: Chapter Questions
Problem 36P
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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. Balance Sheet at December 31. Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $420. b. Borrowed $1,200 cash from the bank during the year. HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Changes in Current Assets and Current Liabilities Current Year Cash Flows from Investing Activities: $ 6,140 820 4,620 (1,340) $ 10,240 Cash Flows from Financing Activities: $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. 170 1,000 $ 1,330 Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) $ 2,330 $ 2,330 0 Previous Year 0 $ 3,680 1,590 4,200 (1,170) $ 8,300 $1,000 750 500 0 4,200 1,850 $ 8,300
Transcribed Image Text: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. Balance Sheet at December 31. Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new hockey equipment for cash, $420. b. Borrowed $1,200 cash from the bank during the year. HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Changes in Current Assets and Current Liabilities Current Year Cash Flows from Investing Activities: $ 6,140 820 4,620 (1,340) $ 10,240 Cash Flows from Financing Activities: $ 580 580 1,700 4,200 3,180 $ 10,240 $ 41,100 38,600 c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. 170 1,000 $ 1,330 Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) $ 2,330 $ 2,330 0 Previous Year 0 $ 3,680 1,590 4,200 (1,170) $ 8,300 $1,000 750 500 0 4,200 1,850 $ 8,300
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