Ch 12 Ex 12-12 A 0 Saved 1 Exercise 12-12 Indirect: Preparing statement of cash flows LO P2, P3 30 points Prior Year MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year Assets Cash $ 38,200 Accounts receivable, net 10,800 Inventory 96,800 Total current assets 145,800 Equipment 53,600 Accum. depreciation-Equipment (24,200) Total assets $175, 200 Liabilities and Equity Accounts payable $ 25,700 Salaries payable 400 Total current liabilities 26,100 Equity Common stock, no par value 129,300 Retained earnings 19,800 Total liabilities and equity $175,200 $ 38,700 13,400 77,500 129,600 45,800 (16,900) $158,500 eBook Print Retence $ 28,100 500 28,660 References 119,000 10,900 $158,500 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 40,300 Cost of goods sold (16,700) Gross profit 23,660 Operating expenses Depreciation expense $ 7,300 Other expenses 5,000 Total operating expense 12,300 Income before taxes 11,300 Income tax expense 2,400 Net income $ 8,900 Additional Information on Current-Year Transactions a. No dividends are declared or paid. bleund additional carly for $10 200 cach 1 a. No dividends are declared or paid. b. Issued additional stock for $10,300 cash. c. Purchased equipment for cash; no equipment was sold. 30 points 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.) eBook MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income 8,900 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Print References Changes in current operating assets and liabilities $ 8,900 Cash flows from investing activities $ 0 Cash flows from financing activities Ch 12 Ex 12-12 Saved 1 Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income $ 8,900 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash 30 points eBook Changes in current operating assets and liabilities Print References $ 8,900 Cash flows from investing activities $ 0 Cash flows from financing activities $ $ 0 8,900 Cash balance at beginning of year Cash balance at end of year $ 8,900