Question

XS Supply Company is developing its annual financial statements at December 31, 2017. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

	2017			2016
Balance Sheet at December 31
Cash	$	39,065		$	34,600
Accounts Receivable		46,200			36,200
Merchandise Inventory		49,700			45,100
Property and Equipment		169,750			130,000
Less: Accumulated Depreciation		(40,200	)		(32,500	)
	$	264,515		$	213,400
Accounts Payable	$	47,950		$	34,300
Wages Payable		2,435			2,700
Note Payable, Long−Term		37,000			45,600
Contributed Capital		97,500			80,100
Retained Earnings		79,630			50,700
	$	264,515		$	213,400
Income Statement for 2017
Sales	$	201,500
Cost of Goods Sold		116,870
Other Expenses		55,700
Net Income	$	28,930

Additional Data:

1. Bought equipment for cash, $39,750.
2. Paid $8,600 on the long-term note payable.
3. Issued new shares for $17,400 cash.
4. No dividends were declared or paid.
5. Other expenses included depreciation, $7,700; wages, $28,100; taxes, $9,900; other, $10,000.
6. 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.

xs SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation exрense Cash payments to purchase equipment Increase accounts receivable Increase in merchandise inventory Increase accounts payable Decrease in wages payable 0 Cash fiows from investing activities 0 Cash flows from financing activities: Net increase in cash during the yean Cash balance, January 1, 2017

Answer 1

289301 XS SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from Operating Activities Net Income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense Increase in accounts receivable Increase in merchandise inventory Increase in accounts payable Decrease in wages payable Net cash flow from Operating Activities Cash flows from Investing Activities Purchase of equipment Net cash flow used for Investing activities Cash flows from Financing Activities Cash paid for note Issuance of common stock Net Cash provided by Financing Activities Net increase in cash Cash balance, January 1, 2017 Cash balance, December 31, 2017 7700 -10000 4600 13650 -265 6485 35415 -397500 -397500 -8600 17400 8800 4465 34600 39065