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 2017, its second year of operations.

Requirement
Prepare the statement of cash flows for Sensations Salon, Inc., for the year ending December 31, 2017, using the indirect method. The following additional information applies to 2017:
• 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, 2017 and 2016 2016 2017 ASSETS $17,455 Cash $10,396 400 Accounts Receivable 1,740 Supplies Equipment (Less Accumulated Depreciation) Total Assets 180 160 5,808 1,908 (424) (1,660) $23,523 $12,440 LIABILITIES $ 850 $ 3,000 $ 1,300 Accounts Payable Notes Payable (long-term) 5,000 STOCKHOLDERS' EQUITY 5,500 14,173 Common Stock 1,500 4,640 Retained Earnings Total Liabilities and Stockholders' Equity $23,523 $12,440