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comparative Dive In Company was started several years ago by two diving instruct

ID: 2432502 • Letter: C

Question

comparative Dive In Company was started several years ago by two diving instructors. The company's balance sheets and income statement are presented revious Balance Sheet at December 31 Cash Accounts Receivable Prepaid Expenses $ 4,880$5,740 2,200 1.100 110 $ 7.300 $6,950 Common Stock Retained Earnings 2 Salaries and Wages Payable S 950 $2 300 2,400 1,600 3950 3050 $ 7,300 $6.950 Income Statement $47.150 Salaries and Wages Expense42.000 4,250 Service Revenue Other Operating Expenses Net Income $ 900 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 $800 cash in exchange for the company's stock Re Plirpade ho satemn f . Pepao the statement of cash os fo tho curent year anded Decomber 31 using the indirect method curment yoar ended Decomber 31 using th (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

Dive in company

statement of cash flows

for the year ended december 31

particular. amount $. amount $

cash. flow from operating activities

net income 900

adjustments to reconcile net income

to net cash provided by operating

activities

increase in account receivables -1100

1100 - 2200

increase in prepaid expenses -110

110 -220

decrease in salaries and wages. -1350

2300 -950

cash flow used in operating activities. -1660

cash flow from investing activies

NILL nill

cash flow from investing activities . nill

cash flow from financing activities

issues of common stock 800

2400- 1600

cash flow from financing activities. 800

cash and cash equivalent during

the year (-1660+800 -860

cash and equivalent at the beginning 5740

cash and cash at the end (5740-860 4880

Notes
1) current asset increase then cash will decreases
Current asset decrease then cash will increase
Current liabilities increase then cash will increase
Current liabilities decrease then cash will decrease

2) It records all transactions in cash in cash flow statement whether related to previous year , current year , following year
Examples additional information above A ,B and C