Clear Strategy Corp., a strategic marketing consulting firm, began operations on January 1, 2016. Its post-closing trial balance at December 31, 2016, and 2017, is shown below along with some other information.

Other information regarding Clear Strategy Corp. and its activities during 2017:

1. Assume all accounts have normal balances.
2. Share dividends were declared and issued during the year.
3. Equipment was sold for cash equal to its book value.

Required:

Using the information provided, prepare a statement of cash flows (applying the indirect method) for the year ended December 31, 2017.

2:

Required: Refer to the information in Question 1. Prepare a statement of cash flows for 2017 using the direct method to report cash inflows and outflows from operating activities.

Other information:

1. All accounts payable balances result from other expenses.

2. All consulting revenue is done on credit.

3. All credits to accounts receivable are receipts from customers.

4. All debits to accounts payable result from payments for other expenses.

Required:

Prepare a statement of cash flows for 2017 that reports the cash inflows and outflows from operating activities according to the indirect method. Show your supporting calculations. Also, prepare a note describing non-cash investing and financing activities.

Transcribed Image Text:

Clear Strategy Corp. Income Statement For Year Ended December 31, 2017 (millions) Revenues: Consulting revenue.. Expenses: Salaries expense.. 8,750 4,700 Other expenses...... 1,600 Depreciation expense Total expenses... 400 6,700 Profit from Operations. Income tax expense. 2,050 . ... 350 Profit . 1,700 Clear Strategy Corp. Income Statement For Year Ended December 31, 2017 (millions) Revenues: Consulting revenue.. Expenses: Salaries expense.. 8,750 4,700 Other expenses...... 1,600 Depreciation expense Total expenses... 400 6,700 Profit from Operations. Income tax expense. 2,050 . ... 350 Profit . 1,700

Answer rating: 100% (QA)

1 2 Noncash investing and financing activities In the given situation there is no noncash investing ... View the full answer