Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 93

Preparing and Evaluating a Statement of Cash Flows (Indirect Method) from Comparative Balance Sheets and Income Statements
Consultex, Inc., was founded in 2010 as a small financial consulting business. The company had done reasonably well in 2010-2012, but started noticing its cash dwindle early in 2013. In January 2013, Consultex had paid $16,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March 2013, the company paid $2,000 cash for dividends and $1,000 to repurchase 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 2013 and also issued stock to a new private investor for $12,000 cash. Comparative balance sheets and income statements for the most recent fiscal year are presented below.


Requirements:
1. Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended October 31, 2013 (using the indirect method).