At December 31 Assets Cash Accounts receivable, net Inventory Total current assets. Equipment MONTGOMERY INCORPORATED Comparative Balance Sheets Accumulated depreciation Equipment Total assets Accounts payable Liabilities and Equity Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Salaries expense Depreciation expense Income before taxes Income tax expense Net income $ 38,500 (16,000) 22,500 4,700 6,100 11,700 2,800 $ 8,900 Current Year Prior Year $ 30,800 $31,000 8,900 79,800 119,500 44, 200 (19,900) $ 143, 800 $ 21,200 400 21,600 102, 400 19,800 $ 143,800 10,900 63,000 104,900 37, 300 (13,800) $128,400 $ 22,900 500 23,400 94, 100 10, 900 $ 128, 400 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $8,300 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. Note: Amounts to be deducted should be indicated by a minus sign. MONTGOMERY, INCORPORATED 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 used in operating activities: Income statement items not affecting cash Changes in current operating assets and liabilities. Cash flows from investing activities $ 0 Adjustments to reconcile net income to net cash used in operating activities: 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 $ 10 $ 0 $ 0 $ 0 $ 0 0