Problem
Shallow Waters Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement are presented below, along with additional information.
|
|
Current Year
|
Prior Year
|
|
Balance Sheet at December 31
|
|
|
|
|
|
|
|
Cash
|
$
|
3,800
|
|
$
|
4,300
|
|
|
Accounts receivable
|
|
1,100
|
|
|
700
|
|
|
Prepaid expenses
|
|
130
|
|
|
170
|
|
|
Equipment
|
|
500
|
|
|
0
|
|
|
$
|
5,530
|
|
$
|
5,170
|
|
|
Wages payable
|
$
|
560
|
|
$
|
1,100
|
|
|
Contributed capital
|
|
1,700
|
|
|
1,200
|
|
|
Retained earnings
|
|
3,270
|
|
|
2,870
|
|
|
$
|
5,530
|
|
$
|
5,170
|
|
|
Income Statement for Current Year
|
|
|
|
|
|
|
|
Lessons revenue
|
$
|
37,450
|
|
|
|
|
|
Wages expense
|
|
33,000
|
|
|
|
|
|
Other expenses
|
|
4,050
|
|
|
|
|
|
Net income
|
$
|
400
|
|
|
|
|
Additional Data:
Prepaid expenses relate to rent paid in advance.
Other expenses were paid in cash.
Purchased equipment for $500 cash at the end of the prior year to be used starting in current year.
An owner contributed capital by paying $500 cash in exchange for the company's stock.
Required:
Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.