12 Shallow Waters Company was started several years ago by two diving instructors The company's comparative balance sheets and income statement are presented below, along with additional information Current Prior Year Year Balance Sheet at December 31 Cash Accounts receivable Prepaid expenses Equipment 1,100 130 500 S 5,530 s 3,800 4,300 700 170 $ 5,170 S 1,100 1,200 Wages payable Contributed capital Retained earnings S 560 1,700 3270 $ 5,530 470 5,170 Income Statement for Current Year Lessons revenue Wages expense Other expenses Net income $37,450 33,000 4,050 S 400 Additional Data a Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash c. Purchased equipment for $500 cash at the end of the prior year to be used starting in current year An owner contributed capital by paying $500 cash in exchange for the company's stock d Required Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.) SHALLOW WATERS COMPANY Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities