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:
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: Previous Year Current Year Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment 34,200 40,200 115,000 33,440 28,400 27,600 37,600 96,000 (29,200) (24,600) $193,640 $165,000 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 35,200 $ 26,600 1,600 40,000 72,200 24,600 1,440 34,400 86,200 36,400 $193,640 $165,000 Income Statement Sales Revenue Cost of Goods Sold Other Expenses $ 116,000 68,000 36,200 Net Income $ 11,800 Additional Data: a. Bought equipment for cash, $19,000. b. Paid $5,600 on the long-term note payable c. Issued new shares of stock for $14,000 cash. d. No dividends were declared or paid e. Other expenses included depreciation, $4,600; Salaries and wages, $19,600; taxes, $5,600; utilities, $6,400 f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability

Answer 1

Cash Flow Statement is prepared as shown below:

XS Supply Company
Statement of Cash Flows
For the year ended December 31, 20XX
Particulars	Amount ($)	Amount ($)
Net Income		11,800
Add:
Depreciation	4,600
Increase in Accounts Receivable		-6,600
Increase in Inventory		-2600
Increase in Accounts Payable		8,600
Decrease in Salaries and Wages payable		-160
Net Cash flows from Operating Activities		15,640
Cash flows from Investing Activities:
Purchase of Equipment	-19,000
Net Cash flows used in investing activities		-19,000
Cash flows from Financing Activities:
Notes payable repaid	-5,600
Cash received from common stock	14,000
Net Cash flows used in financing activities		8,400
Net increase in Cash balance		5,040
Cash as of January 1,20XX		28,400
Cash as of December 31, 20XX		33,440

Working:

Equipment
Particulars	Amount ($)	Particulars	Amount ($)
opening	96,000
Cash	19,000
	115,000		0
closing	115,000
Acc Dep
Particulars	Amount ($)	Particulars	Amount ($)
		opening	24,600
		Dep	4,600
	0		29,200
		closing	29,200
Retained earnings
Particulars	Amount ($)	Particulars	Amount ($)
Dividend	0	opening	24,600
		Net Income	11,800
	0		36,400
		closing	36,400