Question: Kate has just completed her first year running Kate's Cards. She has been preparing monthly income statements and balance sheets, so she knows that her
Kate has just completed her first year running Kate's Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, however, prepared a statement of cash flows. Kate provides you with the year-end income statement and balance sheet and asks for a statement of cash flows for Kate's Cards. Additional information: 1. there were no disposals of equipment during the year, 2. Dividends in the amount of 1300 were paid in cash during the year, and prepaid expenses relate to operating expenses.
a. A statement of cash flows for Kate's Cards for the year ended August 31,209, using the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance sheet account balances were zero.
b. A statement of cash flows for Kate's Cards for the year ended August 31, 2019, using the direct method.
Kate's Cards-Income Statement-Year ending August 31, 2019
Sales Revenue........................................$185000
Cost of Goods Sold.................................106000
Gross Profit.................................................79000
Operating Expenses
Wages............................................................18000
Consulting....................................................11850
Insurance......................................................1200
Utilities...........................................................2400
Rent.................................................................14400
Depreciation................................................3250
Total Operating Expenses...................51100
Income from operations........................27900
Interest Expense.......................................900
Income before income tax...................27000
Income tax expense................................5400
Net income...................................................21600
Kate's Cards-Balance Sheet-As of August 31, 2019
Assets
Current Assets
Cash...............................................................17400
Accounts Receivable.............................11000
Inventory.......................................................16000
Prepaid Insurance....................................1000
Total Current Assets..............................45400
Equipment....................................................17500
Accumulated depreciation..................(3250)
Total Assets................................................59650
Liabilities
Current Liabilities
Accounts Payable....................................6200
Unearned revenue...................................1250
Other current liabilities.........................1900
Total current liabilities...........................9350
Note payable.............................................15000
Total Liabilities..........................................24350
Stockholder's Equity
Common Stock........................................500
Additional paid in capital.....................9500
Preferred Stock.......................................5000
Retained earnings..................................20300
Total stockholder's equity..................35300
Total liabilities & stockholder's equity......59650
Can you help me calculate to fill in my spreadsheet template?
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