Swing It Inc was started several years ago by two tennis ins

Swing It, Inc, was started several years ago by two tennis instructors. The company\'s comparative balance sheets and income statement follow, along with additional information Balance Sheet at December 31 $ 6,180 $ 4,160 890 1,730 5,390 4,900 Accumulated Depreciation-Equipment (1,480) (1,240) Accounts Receivable Equipment $10,980 $9,550 Accounts Payable Salaries and Wages Payable Note Payable (long-term Common Stock Retained Earnings $ 710 $ 1.200 750 1,600 4900 4900 3,260 2.200 10,980 $ 9,550 Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense 39,700 37.200 240 1.200 Net Income s 1,060 Additional Dat a Bought new eq b Borrowed $1,100 cash from the bank during the year c Accounts Payable includes only pur tennis equipment for cash, $490 chases of services made on credit for operating purposes Because here are no Sability accounts relating to incomo tax assume that this expense was fully paid in cash DOLL F1 F4 FS F10 F11 2 3

Solution

Cash flow indirect method Cash flow from operating activities Net income 1060 Adjustments to reconcile the net income Depreciation expense 240 Changes in current asset and liabilities Decrease in accounts receivable 840 Decrease in accounts payable -490 Decrease in salaries and wages payable -240 350 Cash flow from operating activities 1410 Cash flow from Investing activities Equipment purchased -490 Cash flow from Investing activities -490 Cash flow from Financing activities Notes payable 1100 Cash flow from Financing activities 1100 Net Cash and cash equivalent 2020 Add Beginning cash and cash equivalent 4160 Ending cash and cash equivalent 6180