Assets Cash Comparative Balance Sheets December 31 MONTGOMERY INC. Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expense Income before taxes Income tax expense Net income $ 7,100 5,500 Current Year $ 31,000 10,300 92,400 133,700 51,200 (23,100) $161,800 $ 24,600 500 25,100 112,800 23,900 $161,800 $ 45,900 (19,100) 26,800 12,600 14,200 3,400 $ 10,800 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $9,400 cash. c. Purchased equipment for cash; no equipment was sold. Prior Year $ 31,200 12,600 72,800 116,600 43,100 (16,000) de do de $143,700 $ 26,600 600 27,200 103,400 13,100 $143,700 1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) 1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities 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