Exercise 12-12 Indirect: Preparing statement of cash flows LO P2, P3 MONTGOMERY INC. Comparative Balance Sheets December 31 Prior Year Current Year Assets $ 33,400 Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment $ 33,200 12,100 108,500 153,800 60,100 (27,100) $186,800 14,700 84,900 133,000 se, 200 (18,500) Total assets $164,7e0 Liabilities and Equity Accounts payable Salaries payable Total current liabilities $ 28,800 $ 30,700 600 700 29,400 31,400 Equity Common stock, no par value Retained earnings Total liabilities and equity 130,000 27,400 118,100 15,200 $164,700 $186,800 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expense $ 53,500 (22,200) 31, 300 $ 8,600 6,600 15,200 Prev 600 Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings 29,400 130, 00 27,400 $186,800 Total liabilities and equity MONTGOMERY INC. Income Statement For Current Year Ended December 31 53,500 (22,200) 31,300 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Total operating expense $ 8,600 6,600 15,200 16,100 3,900 $ 12,200 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 $11,900 cash. c. Purchased equipment for cash; no equipment was sold 1. Use the above information to prepare a statement of cash flows for deducted should be indicated by a minus sign.) MONTGOMERY, INC. 1. Use the above information to prepare a statement of cash flows for the cur deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Changes in current operating assets and liabilities $ Cash flows from investing activities Cash flows from financing activities Changes in current operating assets and liabilities $ 0 Cash flows from investing activities $ 0 Cash flows from financing activities 0 $ Cash balance at beginning of year Cash balance at end of year 0 A