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. Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Current Year Previous Year $ 6,300 900 $ 4,000 1,750 5,500 (1,500) 5,000 (1,250) $11,200 $ 9,500 $ 500 $ 1,000 500 750 Note Payable (long-term) 1,700 500 Common Stock 5,000 5,000 Retained Earnings 3,500 2,250 Total Liabilities and Stockholders' Equity $11,200 $ 9,500 Income Statement Service Revenue $37,500 Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income 35,000 250 1,000 $ 1,250 Additional Data: a. Bought new hockey equipment for cash, $500. b. Borrowed $1,200 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 current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) 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 Decrease in Accounts Payable Decrease in Salaries and Wages Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Flows from Financing Activities: 250 (250) $ 1,250 1,250 0 0 $ 0