This exercise continues the accounting for Sensations Salon, Inc., from the Continuing Exercise in Chapter 10. Assume Sensations Salon, Inc., had the following comparative balance sheet at the end of 2019, its second year of operations.

Requirement

Prepare the statement of cash flows for Sensations Salon, Inc., for the year ending December 31, 2019, using the indirect method. The following additional information applies to 2019:

? Common stock was issued at par value.

? No dividends were declared or paid during the year.

? No equipment was sold during the year, and all purchases of equipment were for cash.

Transcribed Image Text:

Sensations Salon, Inc. Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 ASSETS $10,396 $17,455 Cash Accounts Receivable 1,740 400 Supplies Equipment (Less Accumulated Depreciation) 180 160 5,808 1,908 (1,660) $23,523 (424) $12,440 Total Assets LIABILITIES $ 850 $ 3,000 $ 1,300 Accounts Payable Notes Payable (long-term) 5,000 STOCKHOLDERS' EQUITY Common Stock 5,500 14,173 1,500 4,640 Retained Earnings $23,523 $12,440 Total Liabilities and Stockholders' Equity