Prepare the statement of cash ?ows for the current year

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Question - Dive In Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement are presented below.

 

Current Year

Previous Year

Balance Sheet at December 31

 

 

Cash

$4,600

$5,450

Account Receivable

2,000

1,000

Prepaid Expenses

200

100

 

$6,800

$6,550

Salaries and Wages Payable

$850

$2,100

Common stock

2,200

1,500

Retained Earnings

3,750

2,950

 

$6,800

$6,550

Income Statement

 

 

Service Revenue

$44,950

 

Salaries and Wagers Expense

40,000

 

Other Operating Expenses

4,150

 

Net Income

$800

 

Additional Data:

a. Prepaid Expenses relate to rent paid in advance.

b. Other Operating Expenses were paid in cash.

c. An owner contributed capital by paying $700 cash in exchange for the company's stock.

Required: Prepare the statement of cash ?ows for the current year ended December 31 using the direct method.

Reference no: EM131591886

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