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Soft Touch Company was started several years ago by two golf instructors. The companys comparative balance sheets and income statement are presented below, along with additional information.

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.

Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, 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 Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income $ 13,520 2,100 11,000 (2,780) $ 23,840 $ 1,300 920 2,800 10,000 8,820 $ 23,840 $ 7,500 3,300 10,000 (2,300) $ 18,500 $ 1,800 1,400 1,000 10,000 4,300 $ 18,500 $ 73,800 67,000 480 1,800 $ 4,520 Additional Data: a. Bought new golf clubs using cash, $1,000. b. Borrowed $1,800 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 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.) Answer is not complete. SOFT TOUCH 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 Changes in Current Assets and Current Liabilities Decrease in Accounts Receivable Decrease in Accounts Payable Decrease in Salaries and Wages Payable >>> 0 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment 0 Net Cash Provided by Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan 0 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 >>