2017 MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 Assets Cash $ 55,600 Accounts receivable, net 12,500 Inventory 112,100 Total current assets 180,200 Equipment 62,100 Accum. depreciation-Equipment (28,100) Total assets $ 214,200 Liabilities and Equity Accounts payable $ 29,900 Salaries payable 500 Total current liabilities 30,400 Equity Common stock, no par value 156,300 Retained earnings 27,500 Total liabilities and equity $ 214,200 $ 55,900 15,400 89,000 160,300 52,700 (19,400) $ 193,600 $ 32,200 700 32,900 145,500 15,200 $ 193,600 MONTGOMERY INC. Income Statement For Year Ended December 31, 2018 Sales $ 54,000 Cost of goods sold (22,400) Gross profit 31,600 Operating expenses Depreciation expense $ 8,700 Other expenses 6,700 Total operating expense 15,400 Income before taxes 16,200 Income tax expense 3,900 Net income $ 12,300 Additional Information a. No dividends are declared or paid in 2018. b. Issued additional stock for $10,800 cash in 2018. c. Purchased equipment for cash in 2018; no equipment was sold in 2018. 1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2018 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year