value 20.00 points Dive In Company was started several years ago by two diving i

Question

value 20.00 points 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 Accounts Receivable Prepaid Expenses $ 4,880 $5,740 1,100 110 2,200 220 $ 7,300 $6,950 Salaries and Wages Payable Common Stock Retained Eanings $ 950 $2,300 1,600 3,050 2,400 3,950 $ 7,300 $6,950 Income Statement Service Revenue Salaries and Wages Expense Other Operating Expenses $47,150 42,000 4,250 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 900 Adjustment to reconcile net income to net cash flow from operating activities Increase account receivable -1100 Increase prepaid rent -110 Decrease salary and wages payable -1350 -2560 Net cash flow from operating activities -1660 Cash flow from investing activities Net cash flow from investing activities 0 Cash flow from financing activities Issue common Stock 800 Net cash flow from financing activities 800 Net cash flow -860 Cash at the beginning of the year 5740 Cash at the end of the year 4880

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