3 15 points E12-18 (Static) Preparing a Statement of Cash Flows (Indirect Method) LO12-2, 12-4, 12-6 Computer Service and Repair was started five years ago by two college roommates. The company's comparative balance sheets and income statement are presented below, along with additional information. Current Year Prior Year Balance Sheet at December 31 Cash $ 3,300 $ 4,000 Accounts receivable 700 500 Prepaid expenses 100 50 Equipment 350 0 Accumulated depreciation (50) 0 $ 4,400 $ 4,550 Wages payable $ 350 $ 1,100 Short-term note payable Common stock 300 0 1,000 1,000 Retained earnings Income Statement for Current Year Service revenue Depreciation expense 2,750 2,450 $ 4,400 $4,550 $34,000 Salaries expense Other expenses Net income 50 30,000 3,650 $ 300 Additional Data: a. Prepaid expenses relate to rent paid in advance. b. Other expenses were paid in cash. c. Purchased equipment for $350 cash at the beginning of the current year and recorded $50 of depreciation expense at the end of the current year. d. At the end of the current year, the company signed a short-term note payable to the bank for $300. 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.) Answer is not complete. COMPUTER SERVICE AND REPAIR Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Increase in accounts receivable Decrease in prepaid expenses Decrease in wages payable Net cash provided by operating activities Cash flows from investing activities: Cash paid for equipment Net cash used for investing activities Cash flows from financing activities: $ 300 (200) 50 (750) (600) 350x 350 Cash proceeds from short-term borrowing Net cash used for financing activities Net increase in cash during the year Cash balance, January 1, current year Cash balance, December 31, current year 300 300 50 x 100 150