1) Preparing a Statement of Cash Flows (Indirect Method) Audio City, Inc., is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: Current Year Previous Year Balance Sheet at December 31 Cash Accounts Recolvable Inventory Equipment 60,000 15,000 22,000 223,000 (60,000) $260,000 65,000 20,000 20,000 150,000 45,000) Accounts Payable Salanes and Wages Payable Note Payable (ong-term Common Stock Retained Eamings $ 8,000 2,000 60,000 100,000 90.000 $260,000 S 19,000 1,000 75,000 70,000 45.000 $210000 Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income $200,000 90,000 60,000 $ 50,000 Additional Data: a. Bought equipment for cash, S73,000. b. Paid S15,000 on the long-term note payable. c. Issued new shares of stock for $30,000 cash. d. Dividends of $5,000 were paid in cash c. Other expenses included depreciation, $15,000; salaries and wages, $20,000; taxes, S25,000. f. Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they were fully paid in cash Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. 2. Evaluate the statement of cash flows