Assets Cash MONTGOMERY INC. Comparative Balance Sheets December 31 Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Current Year $ 30,300 Prior Year $ 30,800 10,900 8,900 79,800 63,000 119,000 104,700 44,200 37,300 (20,000) (13,800) $143,200 $ 21,300 400 21,700 101,800 $128,200 $ 22,900 500 23,400 93,900 Common stock, no par value Retained earnings 19,700 10,900 Total liabilities and equity $143,200 $128,200 Sales MONTGOMERY INC. Income Statement For Current Year Ended December 31 Cost of goods sold $ 38,500 (16,000) Gross profit Operating expenses Depreciation expense Other expenses Total operating expense Income before taxes Income tax expense Net income 22,500 $ 6,200 4,700 10,900 11,600 2,800 $ 8,800 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $7,900 cash. c. Purchased equipment for cash; no equipment was sold. 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 $ 0 Cash flows from investing activities Cash flows from financing activities EA $ Cash balance at beginning of year Cash balance at end of year 0 69 69 $ 0 0 $ 0