Exercise 12-12 Indirect: Preparing statement of cash flows LO P2, P3 Prior Year MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year Assets Cash $ 30,800 Accounts receivable, net 8,90 Inventory 79,800 Total current assets 119,500 Equipment 44,280 Accum. depreciation Equipment (19,900) Total assets $143,800 Liabilities and Equity Accounts payable $ 21,200 Salaries payable 400 Total current liabilities 21,600 Equity Common stock, no par value 102,4ee Retained earnings 19,800 Total liabilities and equity $143,800 $ 31,000 10,900 63,800 104,900 37,380 (13,800) $128,400 $ 22,900 529 23,480 94, 100 10,900 $128,400 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 38,500 Cost of goods sold (16,000) Gross profit 22,580 Operating expenses Depreciation expense 56,100 Other expenses 4,700 Total operating expense 18,888 Income before taxes 11,700 Income tax expense Net Income $ 8,980 2,800 Additional Information on Current-Year Transactions a. No dividends are declared or paid b. Issued additional stock for $8,300 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 deducted should be indicated by a minus sign.) 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.) 1ts MONTGOMERY, INC Statement of Cash Flows indirect Method) For Current Year Ended December 31 Cash flows from operating activities Bool Print Adjustments to reconcile net income to net cash provided by operations Income statementems not affecting cash Merences Changes in current operating assets and tables $ Cash flows from investing activities S Cash flows from financing activities S $ Cash balance at beginning of year Cash balance at end of year S 0