Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information. Current Year Previous Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Loss on Disposal of Equipment Income Tax Expense Net Income $ 6,320 840 4,560 (1,220) $ 10,500 $ 660 560 1,500 4,400 3,380 $ 10,500 $ 3,860 1,630 4,400 (1,190) $ 8,700 $ 1,100 750 500 4,400 1,950 $ 8, 700 $ 40, 700 38,200 440 490 140 $ 1,430 Additional Data: a. Bought new equipment for $1,500 cash and sold existing equipment for $440 cash. The equipment that was sold had cost $1,340 and had Accumulated Depreciation of $410 at the time of sale. b. Borrowed $1,000 cash from the bank during the year. c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash. Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adimetmante todoconsilo Not Income to Nat Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. HEADS UP COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense Decrease in Accounts Receivable Loss on Disposal of Equipment Decrease in Salaries and Wages Payable 0 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities 0 Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31