Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done...

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Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $16,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,000 cash for dividends and $1,000 to repurchase and eliminate Consultex stock that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $5,000 by signing a new promissory note in May and also issued stock to a new private investor for $12,000 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INCORPORATED Balance Sheet October 31 Assets Cash Accounts Receivable Prepaid Rent Land Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 2021 $ 11,000 14,000 2,000 26,000 $ 53,000 2020 $ 14,000 12,000 3,000 10,000 $139,000 $ 2,000 $ 3,000 1,000 15,000 20,000 15,000 1,000 12,000 9,000 14,000 $ 53,000 $ 39,000 CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income Required: 2021 2020 $ 158,000 $ 161,000 98,000 97,000 36,000 30,000 19,700 20,000 4,300 14,000 1,300 4,200 $ 3,000 $ 9,800 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.) CONSULTEX, INCORPORATED Statement of Cash Flows For the Year Ended October 31, 2021 Cash Flows from Operating Activities: Net Income Changes in Current Assets and Current Liabilities $ 3,000 3,000 Cash Flows from Investing Activities: Cash Flows from Financing Activities: $ 0 Consultex, Incorporated, was founded in 2018 as a small financial consulting business. The company had done reasonably well from 2018 through 2020 but started noticing its cash dwindle early in 2021. In January 2021, Consultex had paid $16,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March, the company paid $2,000 cash for dividends and $1,000 to repurchase and eliminate Consultex stock that had previously been issued for $1,000. To improve its cash position, Consultex borrowed $5,000 by signing a new promissory note in May and also issued stock to a new private investor for $12,000 cash. Year-end comparative balance sheets and income statements are presented below. CONSULTEX, INCORPORATED Balance Sheet October 31 Assets Cash Accounts Receivable Prepaid Rent Land Total Assets Liabilities and Stockholders' Equity Salaries and Wages Payable Income Taxes Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity 2021 $ 11,000 14,000 2,000 26,000 $ 53,000 2020 $ 14,000 12,000 3,000 10,000 $139,000 $ 2,000 $ 3,000 1,000 15,000 20,000 15,000 1,000 12,000 9,000 14,000 $ 53,000 $ 39,000 CONSULTEX, INCORPORATED Income Statement For the Year Ended October 31 Sales Revenue Salaries and Wages Expense Rent Expense Utilities Expenses Income before Income Tax Expense Income Tax Expense Net Income Required: 2021 2020 $ 158,000 $ 161,000 98,000 97,000 36,000 30,000 19,700 20,000 4,300 14,000 1,300 4,200 $ 3,000 $ 9,800 1. Prepare a properly formatted Statement of Cash Flows for Consultex, Incorporated, for the year ended October 31, 2021 (using the indirect method). (Amounts to be deducted should be indicated with a minus sign.) CONSULTEX, INCORPORATED Statement of Cash Flows For the Year Ended October 31, 2021 Cash Flows from Operating Activities: Net Income Changes in Current Assets and Current Liabilities $ 3,000 3,000 Cash Flows from Investing Activities: Cash Flows from Financing Activities: $ 0