2018 MONTGOMERY INC. Comparative Balance Sheets December 31, 2019 and 2018 2019 Assets Cash $ 30,400 Accounts receivable, net 10,050 Inventory 90,100 Total current assets 130,550 Equipment 49,900 Accum. depreciation-Equipment (22,500) Total assets $157,950 Liabilities and Equity Accounts payable $ 23,900 Salaries payable 500 Total current liabilities 24,400 Equity Common stock, no par value 110,000 Retained earnings 23,550 Total liabilities and equity $157,950 $ 30,550 12,150 70,150 112,850 41,500 (15,300) $ 139,050 $ 25,400 600 26,000 100,000 13,050 $139,050 MONTGOMERY INC. Income Statement For Year Ended December 31, 2019 Sales $ 45,575 Cost of goods sold (18,950) Gross profit 26,625 Operating expenses Depreciation expense $ 7,200 Other expenses 5,550 Total operating expense 12,750 Income before taxes 13,875 Income tax expense 3,375 Net income $ 10,500 Additional Information a. No dividends are declared or paid in 2019. b. Issued additional stock for $10,000 cash in 2019. c. Purchased equipment for cash in 2019; no equipment was sold in 2019. 1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2019, 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, 2019 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 $ 0