Exercise 12-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3 At December 31 Assets Cash MONTGOMERY INCORPORATED Comparative Balance Sheets. Accounts receivable, net Current Year Prior Year $ 30,400 10,050 $ 30,550 12,150 90,100 Inventory Total current assets Equipment Accumulated 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 INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Salaries expense Depreciation expense Income before taxes Income tax expense Net income $ 45,575 (18,950) 26,625 5,550 7,200 13,875 3,375 $ 10,500 $ 157,950 $ 23,900 130,550 49,900 (22,500) 500 24,400 110,000 23,550 $ 157,950 70,150 112,850 41,500 (15,300) $ 139,050 $ 25,400. 600 26,000 100,000 13,050 $ 139,050 Additional Information on Current-Year Transactions Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $10,000 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.) Answer is not complete. MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities S 10,500 Adjustments to reconcile net income to net cash used in operating activities: Income statement items not affecting cash $ 7,200 0 Changes in current operating assets and liabilities (19,950) (1,500) (100) O 0 (8,400) (8,400) 1,200 0 Changes in current operating assets and liabilities (19,950) (1,500) (100) 0x Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year (8,400) (8,400) $ (20,650) 10,000 10,000 x $ 20,000 (150) 30,550x $ 30,400 S 29,750 30,400 $ 60,150