Develop the statement of cash flows for year ended december

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Problem

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 $ 4,300 Accounts receivable 1,100 700 Prepaid expenses 130 170 Equipment 500 0 $ 5,530 $ 5,170 Wages payable $ 560 $ 1,100 Contributed capital 1,700 1,200 Retained earnings 3,270 2,870 $ 5,530 $ 5,170 Income Statement for Current Year Lessons revenue $ 37,450 Wages expense 33,000 Other expenses 4,050 Net income $ 400 Additional Data: Prepaid expenses relate to rent paid in advance. Other expenses were paid in cash. Purchased equipment for $500 cash at the end of the prior year to be used starting in current year. An owner contributed capital by paying $500 cash in exchange for the company's stock.

Required:

Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)

Reference no: EM131975622

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