Consultex, Inc., was founded in 2010 as a small financial consulting business. The company had done reasonably well in 2010–2012, but started noticing its cash dwindle early in 2013. In January 2013, Consultex had paid $16,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March 2013, the company paid $2,000 cash for dividends and $1,000 to repurchase 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 2013 and also issued stock to a new private investor for $12,000 cash. Comparative balance sheets and income statements for the most recent fiscal year are presented below.

Requirements:
1. Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended October 31, 2013 (using the indirect method).
2. What one thing can Consultex reasonably change in 2014 to avoid depleting its cash?

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CONSULTEX, INC. Balance Sheet October 31 2013 2012 Assets Cash Accounts Receivable Prepaid Rent Land $11,000 14,000 2,000 26,000 $53,000 $14,000 12,000 3,000 10,000 $39,000 Total Assets Liabilities and Stockholders' Equity Wages Payable Income Taxes Payable Notes Payable (long-term) Contributed Capital Retained Earnings $2,000 1,000 15,000 20,000 15,000 $53,000 $3,000 1,000 12,000 9,000 14,000 $39,000 Total Liabilities and Stockholders' Equity CONSULTEX, INC. Income Statement For the Year Ended October 31 2013 2012 Sales Revenue Wages Expense Rent Expense Other Operating Expenses Income before Income Tax Expense Income Tax Expense Net Income $158,000 98,000 36,000 19,700 4,300 1,300 $ 3,000 $161,000 97,000 30,000 14,000 4,200 $9,800