Dive In Company was started several years ago by two diving instructors. The company's comparative balance sheets and income statement, as well as additional information, are presented below. Current Year Previous Year $ 6,175 1,250 125 Balance Sheet at December 31 Cash Accounts Receivable Prepaid Rent Total Assets Salaries and Wages Payable Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Rent and Office Expenses Net Income $ 5,300 2,500 250 $ 8,050 $ 1,100 2,700 4,250 $ 8,050 $ 7,550 $ 2,600 1,750 3,200 $ 7,550 $ 50,450 45,000 4,400 $ 1,050 Additional Data: a. Rent is paid in advance each month, and Office Expenses are paid in cash as incurred. b. An owner contributed capital by paying $950 cash in exchange for the company's stock. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) Answer is complete but not entirely correct. DIVE IN COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income S 1,050 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Changes in current assets and current liabilities Increase in Accounts Receivable 52,350 Decrease in Salaries and Wages Payable (49,650) X Decrease in Prepaid Rent X (140) Decrease in Prepaid Rent > (1,990) X Net Cash Used in Operating Activities 1,620 Cash Flows from Financing Activities: Cash Proceeds from Issuing Stock 1,100 % Net Cash Provided by Financing Activities Net Decrease in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 1,100 (890) X 6,610 5,720 S