Computer Service and Repair was started five years ago by two college roommates. The companys comparative balance sheets and income statement are presented below, along with additional information.

Current Year Prior YearBalance Sheet at December 31 Cash$3,250 $4,000 Accounts receivable 700 500 Prepaid expenses 100 50 Equipment 350 0 Accmulated depreciation (50) 0 $4,350 $4,550 Wages payable$350 $1,100 Short-term note payable 250 0 Common stock 1,000 1,000 Retained earnings 2,750 2,450 $4,350 $4,550 Income Statement for Current Year Service revenue$34,000 Depreciation expense 50 Salaries expense 30,000 Other expenses 3,650 Net income$300

---

;a. Prepaid expenses relate to rent paid in advance.

b. Other expenses were paid in cash.

c. Purchased equipment for $350 cash at the beginning of the current year and recorded $50 of depreciation expense at the end of the current year.

d. At the end of the current year, the company signed a short-term note payable to the bank for $250;Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method