2017 MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 Assets Cash $ 60,100 Accounts receivable, net 19,800 Inventory 177,500 Total current assets 257,400 Equipment 98,300 Accum. depreciation-Equipment (44,300) Total assets $311,400 Liabilities and Equity Accounts payable $ 47,100 Salaries payable 1,000 Total current liabilities 48,100 Equity Common stock, no par value 216,100 Retained earnings 47,200 Total liabilities and equity $311,400 $ 60,000 23,900 138,000 221,900 81,600 (30, 100) $273,400 $ 50,000 1,200 51,200 196,100 26, 100 $273,400 MONTGOMERY INC. Income Statement For Year Ended December 31, 2018 Sales $ 90,900 Cost of goods sold (37,800) Gross profit 53,100 Operating expenses Depreciation expense $14,200 Other expenses 11,100 Total operating expense 25,300 Income before taxes 27,800 Income tax expense 6,700 Net income $ 21,100 Additional Information a. No dividends are declared or paid in 2018. b. Issued additional stock for $20,000 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 Not Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities SOV Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2018 Net Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash 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