MONGOMERY INC. Comparative Balance Sheets December 31 Current Year Prior Year $ 33,200 12, 100 108,500 153, 800 60, 100 (27, 100) $ 186, 800 $ 33, 400 14,700 84,900 133,000 50,200 (18,500) $ 164,700 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. 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 $ $ 28, 800 600 29,400 30,700 700 31,400 130,000 27,400 $ 186,800 118, 100 15, 200 $ 164,700 $ 53,500 (22,200) 31,300 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 8,600 other expenses 6,600 Total operating expense Income before taxes Income tax expense Net income 15, 200 16, 100 3,900 $ 12,200 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $11,900 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) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities $ Cash flows from investing activities $ Cash flows from financing activities 0 $ $ 0 Cash balance at beginning of year Cash balance at end of year $ 0