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Shallow Waters Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement are...

Shallow Waters Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement are presented below, along with additional information.

  

  Current Year Prior Year Balance Sheet at December 31       

Cash$3,800  $4,200

 Accounts receivable 1,000   800 

Prepaid expenses 130   190

 Equipment 500   0  

$5,430  $5,190 

Wages payable$840  $1,300 

Contributed capital 2,100   1,500 

Retained earnings 2,490   2,390  $5,430  $5,190 

Income Statement for Current Year      

 Lessons revenue$38,450     

Wages expense 34,000    

Other expenses 4,350    

 Net income$100      

 

Additional Data: 

  1. Prepaid expenses relate to rent paid in advance.
  2. Other expenses were paid in cash.
  3. Purchased equipment for $500 cash at the end of the prior year to be used starting in current year.
  4. An owner contributed capital by paying $600 cash in exchange for the company's stock.


I need help knowing how to prepare the statement of cash flows for the year ended December 31, current year, using the indirect method, and how to list cash outflows as negative amounts.

Top Answer

Answer Shallow Waters Company Statement of Cash Flows for the year ended December 31   Cash flows from operating activities... View the full answer

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Net incom e ildjustments to reconcile net income to net cash flow— from ope...

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Statement of cash flow: It is the statement which includes the outflow or inflow of cash in the... View the full answer

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