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 $ 33,720 $ 28,700 Accounts Receivable 34,600 27,800 Inventory 40,600 37,800 Equipment 118,000 98,000 Accumulated Depreciation—Equipment (29,600 ) (24,800 ) $ 197,320 $ 167,500 Accounts Payable $ 35,600 $ 26,800 Salaries and Wages Payable 1,320 1,500 Note Payable (long-term) 36,200 42,000 Common Stock 87,400 72,400 Retained Earnings 36,800 24,800 $ 197,320 $ 167,500 Income Statement Sales Revenue $ 118,000 Cost of Goods Sold 69,000 Other Expenses 37,000 Net Income $ 12,000 Additional Data: a. Bought equipment for cash, $20,000. b. Paid $5,800 on the long-term note payable. c. Issued new shares of stock for $15,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $4,800; Salaries and wages, $19,800; taxes, $5,800; utilities, $6,600. f. 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.

Answer 1

XS Company

Cash Flow Statement

	XS Company
	Cash Flow Statement
	for the year ended December 31,
Cash flow from operating activities:
Net Income		$!2,000
Adjustments to reconcile net income to net cash provided by operating activites -
Depreciation expense	$4,800
Increase in accounts receivable	($6,800)
Increase in inventory	($2,800)
Increase in Accounts Payable	$8,800
Decrease in salaries and wages	($180)
Net cash provided by operating activities		$3,820
Net cash from operating activities		$15,820
Cash flow from investing activities:
Payment towards purchase of equipment	($20,000)
Net cash from investing activities		($20,000)
Cash flow from financing activities:
Issue of common shares for cash	$15,000
payment towards long-tern note	($5,800)
Net cash flow from financing activities		$9,200
Excess of cash over disbursements		$5,020
Add: Beginning cash balance		$28,700
Ending cash balance		$33,720