Computer Service and Repair was started five years ago by two college roommates. The company's comparative balance sheets and income statement are presented below, along with additional information. Prior Current Year Year Balance Sheet at December 31 Cash $ 3,300 $4,000 Accounts receivable Prepaid expenses 700 500 100 50 Equipment 350 0 Accumulated depreciation (50) 0 $ 4,400 $4,550 Wages payable. $ 350 $1,100 Short-term note payable 300 0 Common stock 1,000 1,000 Retained earnings 2,750 2,450 $4,400 $4,550 Income Statement for Current Year Service revenue $34,000 Depreciation expense 50 Salaries expense 30,000 Other expenses 3,650 Net income 9 300 Additional Data: 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 $300. Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Increase in accounts receivable Decrease in wages payable Cash flows from investing activities: Cash paid for equipment Cash flows from financing activities: Cash proceeds from short-term borrowing S $ 300 50 (200) (750) (600) (350) (350) 0