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

Exercise 11

Accounting for Cash Flows
During a recent year (ended December 31, 2014), Nicole's Getaway Spa (NGS) reported net income of $2,300. The company reported the following activities:
a. Increase in inventories of $400.
b. Depreciation of $3,000.
c. Increase of $2,170 in prepaid expenses.
d. Payments of $4,600 on long-term debt.
e. Purchased new spa equipment for $7,582.
f. Payments on accounts payable exceeded purchases by $320.
g. Collections on accounts receivable exceeded credit sales by $859.
h. Issued $10,000 of common stock.
Required:
Based on this information, prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method. Assume the cash balance at December 31, 2013, was $7,000.