At December 31 Assets Cash MONTGOMERY INCORPORATED Comparative Balance Sheets Accounts receivable, net Inventory Total current assets Equipment Accumulated 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 INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Salaries expense Depreciation expense $ 90,900 (37,800) 53,100 11,100 14,200 27,800 6,700 $ 21,100 Current Year Prior Year $ 60,100 19,800 177,500 257,400 98,300 (44,300) $ 311,400 $ 60,000 23,900 138,000 221,900 81,600 (30,100) $ 273,400 $ 50,000 1,200 $ 47,100 1,000 48,100 51,200 216,100 196,100 47,200 26,100 $311,400 $273,400 Income before taxes Income tax expense Net income Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $20,000 cash. c. Purchased equipment for cash; no equipment was sold. Cash flows from operating activities MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 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