2018 2017 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets $ 30,400 30,550 12,150 70,150 112,850 41,500 22,500)(15,300 $157,950 $139,050 10,050 90,100 130,550 49,900 Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity $ 23,900 500 24,400 25,400 600 26,000 100,000 13,050 $157,950 $139,050 110,000 23,550 MONTGOMERY INC Income Statement For Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses $ 45,575 (18,950 26,625 Depreciation expense $ 7,200 5,550 Other expenses Total operating expense Income before taxes Income tax expense Net income 12,750 13,875 3,375 $ 10,500 a. No dividends are declared or paid in 2018. b. Issued additional stock for $10,000 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 Cash flows from operating activities Net income 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