Exercise 12-12 Indirect: Preparing statement of cash flows LO P2, P3 MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year $ 58,200 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Other expenses Depreciation expense Total operating expense Income before taxes Income tax expense Net income Prior Year 18,300 164,100 240,600 90,900 (41,000) $290,500 $ 43,600 900. 44,500 202,500 $ 58,100 22,300 128,800 209,200 76,200 (28,100) $257,300 $ 46,600 1,100 47,700 185,700 43,500 $290,500 $ 83,500 (34,600) 48,900 $12,900 10,300 23,200 25,700 6,100 $ 19,600 23,900 $257,300 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $16,800 cash. c. Purchased equipment for cash; no equipment was sold. 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.) MONTORNESVINC < Prev 4 of 5 Next > Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $16,800 cash. c. Purchased equipment for cash; no equipment was sold. 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.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income $ 19,600. Adjustments to reconcil net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities $ 19,600 Cash flows from investing activities $ 0 Cash flows from financing activities $ 0 $ 19,600 Cash balance at beginning of year Cash balance at end of year $ 19,600