ventory purchases only.Statement of Cash Flows (Direct Method) Refer to the data given for the Geary Company imPrepare a statenlellfor wages and other operating expenses." AcccashPadUtitiesRent ..DepreciaTotal opb.P12-9B.LO4(Appendix12A)IncomeInteresProblem P12-4B.RequiredCompute the change in cash that occurred during 2019.b.Prepare a statement of cash flows using the direct method. Use one cash outflow for "cash pMBCIncomхa.IncorpaidNetfor wages and other operating expenses.SERIAL PROBLEM: KATE'S CARDS(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 11.)Kate has just completed her first year running Kate's Cards. She has been preparing monthly incomestatements and balance sheets, so she knows that her company has been profitable and that there iscash in the bank. She has not, however, prepared a statement of cash flows. Kate providesthe year-end income statement and balance sheet and asks that you prepare a statement of cash flowsSP12.Kate'syou withCardsfor Kate's Cards.Additional information:1. There were no disposals of equipment during the2. Dividends in the amount of $1,300 were paid in cash during the3. Prepaid expenses relate to operating expenses.year.year.RequiredPrepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, usingthe indirect method. Hint: Since this was Kate's first year of operations, the beginning balancea.sheet account balances were zero.Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, usingthe direct method. (Appendix 12A) 8cambridge Business PublishersChapter 12615Statement of Cash FlowsKATE'S CARDSIncome StatementYear Ended August 31, 2019Sales revenue. , .Cost of goods sold . ..Gross profit. . . .Operating expenses$185,000106,000Wages79,000Consulting.Insurance .18,00011,8501,200Utilities.Rent...Depreciation. .Total operating expenses.Income from operations.Interest expense. .2,40014,4003,25051,10027,900Income before income taxIncome tax expense. .90027,000Net income.5,400$ 21,600KATE'S CARDSBalance SheetAs of August 31, 2019AssetsCurrent assetsCash....... $17,400Accounts receivable..11,000Inventory...16,0001,000Prepaid insurance.Total current assets.45,400Equipment ...Accumulated depreciation.17,500(3,250)Total assets .$59,650LiabilitiesCurrent liabilities.. $ 6,2001,2501,900Accounts payable. .. ..Unearned revenue .Other current liabilities.. ..9,350Total current liabilities. . .. .Note payable. ..Total liabilities. . . .15,00024,350Stockholders' equityCommon stock. . . . .Additional paid-in-capital.Preferred stock. . ..Retained earningsTotal stockholders' equity. ..5009,5005,00020,30035,300$59,650Total liabilities and stockholders' equity.. ..

Question
Asked Oct 14, 2019
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Solutions to A and B are needed. 

ventory purchases only.
Statement of Cash Flows (Direct Method) Refer to the data given for the Geary Company im
Prepare a statenlell
for wages and other operating expenses." Acc
cash
Pad
Utities
Rent ..
Deprecia
Total op
b.
P12-9B.
LO4
(Appendix
12A)
Income
Interes
Problem P12-4B.
Required
Compute the change in cash that occurred during 2019.
b.
Prepare a statement of cash flows using the direct method. Use one cash outflow for "cash p
MBC
Incom
х
a.
Incor
paid
Net
for wages and other operating expenses.
SERIAL PROBLEM: KATE'S CARDS
(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 11.)
Kate has just completed her first year running Kate's Cards. She has been preparing monthly income
statements and balance sheets, so she knows that her company has been profitable and that there is
cash in the bank. She has not, however, prepared a statement of cash flows. Kate provides
the year-end income statement and balance sheet and asks that you prepare a statement of cash flows
SP12.
Kate's
you with
Cards
for Kate's Cards.
Additional information:
1. There were no disposals of equipment during the
2. Dividends in the amount of $1,300 were paid in cash during the
3. Prepaid expenses relate to operating expenses.
year.
year.
Required
Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, using
the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance
a.
sheet account balances were zero.
Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, using
the direct method. (Appendix 12A)
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ventory purchases only. Statement of Cash Flows (Direct Method) Refer to the data given for the Geary Company im Prepare a statenlell for wages and other operating expenses." Acc cash Pad Utities Rent .. Deprecia Total op b. P12-9B. LO4 (Appendix 12A) Income Interes Problem P12-4B. Required Compute the change in cash that occurred during 2019. b. Prepare a statement of cash flows using the direct method. Use one cash outflow for "cash p MBC Incom х a. Incor paid Net for wages and other operating expenses. SERIAL PROBLEM: KATE'S CARDS (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapter 1 through Chapter 11.) Kate has just completed her first year running Kate's Cards. She has been preparing monthly income statements and balance sheets, so she knows that her company has been profitable and that there is cash in the bank. She has not, however, prepared a statement of cash flows. Kate provides the year-end income statement and balance sheet and asks that you prepare a statement of cash flows SP12. Kate's you with Cards for Kate's Cards. Additional information: 1. There were no disposals of equipment during the 2. Dividends in the amount of $1,300 were paid in cash during the 3. Prepaid expenses relate to operating expenses. year. year. Required Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, using the indirect method. Hint: Since this was Kate's first year of operations, the beginning balance a. sheet account balances were zero. Prepare a statement of cash flows for Kate's Cards for the year ended August 31, 2019, using the direct method. (Appendix 12A)

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8cambridge Business Publishers
Chapter 12
615
Statement of Cash Flows
KATE'S CARDS
Income Statement
Year Ended August 31, 2019
Sales revenue. , .
Cost of goods sold . ..
Gross profit. . . .
Operating expenses
$185,000
106,000
Wages
79,000
Consulting.
Insurance .
18,000
11,850
1,200
Utilities.
Rent
.
..
Depreciation. .
Total operating expenses.
Income from operations.
Interest expense. .
2,400
14,400
3,250
51,100
27,900
Income before income tax
Income tax expense. .
900
27,000
Net income.
5,400
$ 21,600
KATE'S CARDS
Balance Sheet
As of August 31, 2019
Assets
Current assets
Cash....
... $17,400
Accounts receivable..
11,000
Inventory.
.
.
16,000
1,000
Prepaid insurance.
Total current assets.
45,400
Equipment ...
Accumulated depreciation.
17,500
(3,250)
Total assets .
$59,650
Liabilities
Current liabilities
.. $ 6,200
1,250
1,900
Accounts payable. .. ..
Unearned revenue .
Other current liabilities.. ..
9,350
Total current liabilities. . .. .
Note payable. ..
Total liabilities. . . .
15,000
24,350
Stockholders' equity
Common stock. . . . .
Additional paid-in-capital.
Preferred stock. . ..
Retained earnings
Total stockholders' equity. ..
500
9,500
5,000
20,300
35,300
$59,650
Total liabilities and stockholders' equity.. ..
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8cambridge Business Publishers Chapter 12 615 Statement of Cash Flows KATE'S CARDS Income Statement Year Ended August 31, 2019 Sales revenue. , . Cost of goods sold . .. Gross profit. . . . Operating expenses $185,000 106,000 Wages 79,000 Consulting. Insurance . 18,000 11,850 1,200 Utilities. Rent . .. Depreciation. . Total operating expenses. Income from operations. Interest expense. . 2,400 14,400 3,250 51,100 27,900 Income before income tax Income tax expense. . 900 27,000 Net income. 5,400 $ 21,600 KATE'S CARDS Balance Sheet As of August 31, 2019 Assets Current assets Cash.... ... $17,400 Accounts receivable.. 11,000 Inventory. . . 16,000 1,000 Prepaid insurance. Total current assets. 45,400 Equipment ... Accumulated depreciation. 17,500 (3,250) Total assets . $59,650 Liabilities Current liabilities .. $ 6,200 1,250 1,900 Accounts payable. .. .. Unearned revenue . Other current liabilities.. .. 9,350 Total current liabilities. . .. . Note payable. .. Total liabilities. . . . 15,000 24,350 Stockholders' equity Common stock. . . . . Additional paid-in-capital. Preferred stock. . .. Retained earnings Total stockholders' equity. .. 500 9,500 5,000 20,300 35,300 $59,650 Total liabilities and stockholders' equity.. ..

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Kate's cards Statement of cash flows For the year ended 31st Augustt 2019 Amount in S Particulars Cash flow from operating activities Net income 21.600 Depreciation on fixed assets 3250 (Increase)/decrease in current assets A/c receivables -11.000 -16,000 Inventory Prepaid insurance -1,000 Increase/ (decrease) in current liabilities A/c payable 6,200 Other liabilities 1,900 Unearned revenue 1,250 Notes payable Net cash provided/(used) by operating activties 15,000 21,200 Net cash provided/(used) by operating activties 21,200 Cash flow from operating activities Purchase of PPE -17,500 Net cash provided/(used) in investing activities -17500 Cash flow from financing activities Issuance of common stock 500 Dividends paid -1,300 Net cash provided/(used) in financing activities -800 Net increase/(decrease) in cash and cash equivale 2,900 Beginning cash balance 0 Ending cash balance 2,900

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