(Solved by Humans)-Preparing and Interpreting a Statement of Cash Flows (Indirect Method) Dive In Company was started...

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Preparing and Interpreting a Statement of Cash Flows (Indirect Method)Dive In Company was started several years ago by two diving instructors. The company’s comparative balance sheets and income statement are presented below. Additional information is presented on the following page. 20102009Balance Sheet at December 31  Cash$ 3,200$4,000Accounts Receivable1,000500Prepaid Expenses10050 $4,550 $ 4,300  Wages Payable$ 350$1,100Contributed Capital1,2001,000Retained Earnings2,7502,450 $ 4,300$4,550  Income Statement for 2010  Lessons Revenue$33,950 Wages Expense30,000 Other Operating Expenses3,650 Net Income$ 300 Additional Data:a. Prepaid Expenses relate to rent paid in advance.b. Other Operating Expenses were paid in cash.c. An owner contributed capital by paying $200 cash in exchange for the company’s stock.Required:1. Prepare the statement of cash flows for the year ended December 31, 2010, using the indirect method.2. Use the statement of cash flows to evaluate the company’s cash flows.