E$12-13$ Preparing and Evaluating a Statement of Cash Flows $($Indirect Method$)$ from

Comparative Balance Sheets and Income Statements

Consultex, Inc., was founded in $2018$ as a small financial consulting business. The company

had done reasonably well in $2018-2020$ 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.

Requirements:

Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended

October $31,2021($using the indirect method$).$

What one thing can Consultex reasonably change in $2022$ to avoid depleting its cash?E$12-13$ Preparing and Evaluating a Statement of Cash Flows $($Indirect Method$)$ from

Comparative Balance Sheets and Income Statements

Consultex, Inc., was founded in $2018$ as a small financial consulting business. The company

had done reasonably well in $20182020$ 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.