Question

XS Supply Company is developing its annual fina

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 Accounts Receivable Inventory Equipment Accumulated Depreciation Equipment $ 32.090 33,200 39.200 107.500 (28,200) S 183,790 $ 27,000 27,100 37.100 91.000 (24, 100) $ 158, 100 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Eamings 34,200 1,090 29,900 83,200 35,400 S 26,100 1,200 35,000 71.700 24.100 $ 158, 100 S 183,790 Income Statement Sales Revenue Cost of Goods Sold Other Expenses S 111.000 65,500 34,200 11,300 Net Income Additional Data: a. Bought equipment for cash $16,500 b. Paid $5,100 on the long-term note payable. c. Issued new shares of stock for $11,500 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, S4 100, Salaries and wages $19.100 taxes. $5,100; utilities $5,900. 1. 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

Cash Flow Statement will be prepared in the following format:

		Workings
Cash Flows from Operating Activities:
Net Income	11,300	given
Depreciation & Amortization	4,100	given
Decrease in Accounts Receivable	-6,100	27100-33200
Decrease in Inventory	-2,100	37100-39200
Decrease in Salaries & Wages payable	-110	1090-1200
Decrease in Accounts Payable	8,100	34200-26100
Decrease in advanced deposits
Cash Flows from Operating Activities:	15,190
Cash Flows from Investing Activities:
Purchase of equipment	-16,500	given
Cash Flows from Investing Activities:	-16,500
Cash Flows from Financing Activities:
Reyament of long term notes	-5,100	given
Stock issued	11,500	given
Cash Flows from Financing Activities:	6,400
Net Increase in Cash	5,090	CFO+CFI+CFF
Add: Beginning Cash balance	27,000
Ending Cash Balance	32,090	given

Notes

A cash flow statement has 3 components:

• Cash from Operating Activities - primarily shows cash generated and used in the main operations of the company including changes in current assets and liabilities
• Cash from Investing Activities - primarily deals with cash used and spent on long term assets like PP&E
• Cash from Financing Activities - primarily shows cash used and spent on long term liabilities and equity