Consultex, Inc., was founded in 2007 as a small financial consulting business. The company had done reasonably well in 2007-2009, but started noticing its cash dwindle early in 2010. In January 2010, Consultex had paid $16,000 to purchase land and repaid $2,000 principal on an existing promissory note. In March 2010, 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 2010 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.
- CONSULTEX, INC.
- Balance Sheet
- October 31
- 2010 2009
- Assets
- Cash $ 11,000 $ 14,000
- Accounts Receivable 14,000 12,000
- Prepaid Rent 2,000 3,000
- Land 26,000 10,000
- Total Assets $ 53,000 $ 39,000
- Liabilities and Stockholders' Equity
- Wages Payable $ 2,000 $ 3,000
- Income Taxes Payable 1,000 1,000
- Notes Payable (long-term) 15,000 12,000
- Contributed Capital 20,000 9,000
- Retained Earnings 15,000 14,000
Total Liabilities and Stockholders' Equity $ 53,000 $ 39,000
- CONSULTEX, INC.
- Income Statement
- For the Year Ended October 31
- 2010 2009
- Sales Revenue $ 158,000 $ 161,000
- Wages Expense 98,000 97,000
- Rent Expense 36,000 30,000
- Other Operating Expenses 19,700 20,000
Required:
Prepare a properly formatted Statement of Cash Flows for Consultex, Inc., for the year ended October 31, 2010.