Heads Up Company was started several years ago by two hockey instructors. The companys comparative balance sheets and income statement follow, along with additional information.

	Current Year	Previous Year
Balance Sheet at December 31
Cash	$ 6,420	$ 4,160
Accounts Receivable	890	1,730
Equipment	5,260	4,900
Accumulated DepreciationEquipment	(1,370)	(1,240)
Total Assets	$ 11,200	$ 9,550
Accounts Payable	$ 710	$ 1,200
Salaries and Wages Payable	510	750
Notes Payable (long-term)	1,600	500
Common Stock	4,900	4,900
Retained Earnings	3,480	2,200
Total Liabilities and Stockholders Equity	$ 11,200	$ 9,550
Income Statement
Service Revenue	$ 39,700
Salaries and Wages Expense	37,200
Depreciation Expense	490
Loss on Disposal of Equipment	540
Income Tax Expense	190
Net Income	$ 1,280

Additional Data:

1. Bought new equipment for $1,750 cash and sold existing equipment for $490 cash. The equipment that was sold had cost $1,390 and had Accumulated Depreciation of $360 at the time of sale.
2. Borrowed $1,100 cash from the bank during the year.
3. 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.)

Additional Data:

1. Bought new golf clubs using cash, $1,000.
2. Borrowed $1,800 cash from the bank during the year.
3. 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 Income Tax 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.)

Any explanations and calculations will be greatly appreciated! :)

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 $ 1,280 490 (490) Changes in Current Assets and Current Liabilities Decrease in Accounts Receivable Decrease in Accounts Payable Decrease in Salaries and Wages Payable Loss on Disposal of Equipment Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Cash Proceeds from Disposal of Equipment 1,280 490 490 Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan 1,100 1,100 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 $ 0