Dive In Company was started several years ago by two diving instructors. The companys comparative balance sheets

Dive In Company was started several years ago by two diving instructors. The company’s comparative balance sheets and income statement are presented below. Additional information is presented on the following page.

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 $200 cash in exchange for the company’s stock.

Required:
1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.
2. Use the statement of cash flows to evaluate the company’s cashflows.

Transcribed Image Text:

2013 2012 Balance Sheet at December 31 3,200 1,000 100 $ 4,300 $ 350 1,200 2,750 4,300 $4,000 500 50 $4,550 $1,100 1,000 2,450 $4,550 Cash Accounts Receivable Prepaid Expenses Wages Payable Contributed Capital Retained Earnings Income Statement for 2013 Lessons Revenue Wages Expense Other Operating Expenses $33,950 30,000 3,650 $ 300 Net Income