Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance...

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Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Current Year Previous Year $ 10,250 $ 14,760 3,400 11,000 (3,990) $ 25,170 4,400 10,000 (3,400) $ 21,250 $ 1,900 $ 2,900 1,360 1,950 3,900 1,000 10,000 10,000 8,010 5,400 Total Liabilities and Stockholders' Equity $ 25,170 $ 21,250 Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new golf clubs using cash, $1,000. b. Borrowed $2,900 cash from the bank during the year. $ 78,600 72,500 590 2,900 $ 2,610 c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that Income Tax Expense was fully paid in cash. 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 with a minus sign.) Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Current Year Previous Year $ 10,250 $ 14,760 3,400 11,000 (3,990) $ 25,170 4,400 10,000 (3,400) $ 21,250 $ 1,900 $ 2,900 1,360 1,950 3,900 1,000 10,000 10,000 8,010 5,400 Total Liabilities and Stockholders' Equity $ 25,170 $ 21,250 Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income Additional Data: a. Bought new golf clubs using cash, $1,000. b. Borrowed $2,900 cash from the bank during the year. $ 78,600 72,500 590 2,900 $ 2,610 c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that Income Tax Expense was fully paid in cash. 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 with a minus sign.)

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ANSWER Soft Touch Company Statement of Cash Flows Indirect Method For the Year Ended December 31 Cas... View the full answer