If you appreciate our work, consider supporting us:

QUESTION:
The comparative balance sheet for
Seaway
Travel​ Services, Inc., for December​ 31,
2023
and
2022​,
is as​ follows:
View the comparative balance sheet.                           
The following information is taken from the records of
Seaway
Travel​ Services, Inc.:
View the transaction data.
Seaway
Travel​ Services, Inc., uses the indirect method for preparing the statement of cash flows. Prepare the operating section of the statement of cash flows for
2023.
​(Use parentheses or a minus sign for numbers to be subtracted or net cash​ outflow.)
Seaway Travel Services, Inc.
Comparative Balance Sheets
December 31, 2023 and 2022
Assets
2023
2022
Current assets:
 
 
Cash
$45,000
$12,000
Accounts receivable
75,000
81,000
Inventory
59,000
19,000
Prepaid insurance
14,000
17,000
Total current assets
$193,000
$129,000
 
 
 
Land
$101,000
$117,000
Equipment
76,000
56,000
Less: Accumulated depreciation
(19,000)
(14,000)
Total assets
$351,000
$288,000
 
 
 
Liabilities
 
 
Current liabilities:
 
 
Accounts payable
$25,000
$32,000
Wages payable
32,000
21,000
Interest payable
14,000
12,000
Income taxes payable
12,000
10,000
Total current liabilities
$83,000
$75,000
 
 
 
Notes payable (long-term)
98,000
88,000
Total liabilities
$181,000
$163,000
 
 
 
Stockholders' equity
 
 
Common stock
$125,000
$115,000
Retained earnings
45,000
10,000
Total stockholders' equity
$170,000
$125,000
 
 
Total liabilities and equity
$351,000
$288,000
pop-up content ends

ANSWER:



 
Seaway Travel Services, Inc.
 
Statement of Cash Flows—Operating Activities Section (Indirect Method)
 
For the Year Ended December 31, 2023
 
Operating Activities:
 
 
 
Net income
 
$40,000
 
Adjustments to reconcile net income to cash basis:
 
 
 
Depreciation expense
$5,000
 
 
Loss on sale of land
3,000
 
 
Decrease in accounts receivable
6,000
 
 
Increase in inventory
(40,000)
 
 
Decrease in prepaid insurance
3,000
 
 
Decrease in accounts payable
(7,000)
 
 
Increase in wages payable
11,000
 
 
Increase in interest payable
2,000
 
 
Increase in income taxes payable
2,000
(15,000)
 
Net cash provided by (used for) operating activities
 
$25,000

Posted by Cleveland on September 5, 2024
Back to Questions