1 The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. Balance Sheet Assets Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Total assets Liabilities Accounts payable Current Year Prior Year $91,500 120,000 50,000 $111,000 105,000 97,500 170,000 48,400) 90,000 (25,000) $422,700 $370,500) $ 15,000 $18,000 Salaries and Mages Payable Notes payable, long-term 3.000 75,000 1.500 90,000 Stockholders' Equitys Common stock. 140,000 Retained earnings 189,700 120,000 149,000 Total liabilities and stockholders' equity $422,700 $370,500 Income Statement Sales $400,000 Cost of goods sold 210,000 Depreciation expense 23,000 Other expenses 100,000 66,200 Other information from the company's records includes the following: Bought equipment for cash, $80,000 Paid $15,000 on long-term note payable. 1 Depreciation expense Other expenses Net income 23,800 100,000 $ 66,200 Other information from the company's records includes the following Bought equipment for cash, $80,000. Paid $15,000 on long-term note payable. Issued new shares of common stock for $20,000 cash. Cash dividends of $25,500 were declared and paid to stockholders. Accounts Payable arose from inventory purchases on credit. Income tax expense ($16,550) and interest expense ($4,500) were paid in full at the end of both years and are included in Other Expenses. Required: a. Prepare the statement of cash flows using the indirect method. Include any supplemental disclosures. (Enter any deductions and cash outflows as a negative value.) WICKERSHAM BROTHERS Inc. Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Chapter 12 Quiz Help Saved 1 WICKERSHAM BROTHERS Inc. Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Changes in current assets and current liabilites: Depreciation Expense Accounts Receivable Mc Graw Hill Cash Flows from Investing Activities: Cash Flows from Financing Activities: $ 0 $ 1 $ 0 Cash Flows from Investing Activities: $ 0 Cash Flows from Financing Activities: Cash and Cash Equivalents, beginning of period Cash and Cash Equivalents, end of period Supplemental Disclosures: $ $