MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash $ 30,800 $ 31,000 Accounts receivable, net 8,900 10,900 Inventory 79,800 63,000 Total current assets 119,500 104,900 Equipment 44,200 37,300 Accum. depreciation-Equipment (19,900) (13,800) Total assets $143,800 $128, 400 Liabilities and Equity Accounts payable $ 21,200 $ 22,900 Salaries payable 400 500 Total current liabilities 21,600 23, 400 Equity Common stock, no par value 102,400 94, 100 Retained earnings 19,800 10,900 Total liabilities and equity $143, 800 $128,400 MONTGOMERY INC. Income Statement For Year Ended December 31, 2018 Sales $ 38,500 Cost of goods sold (16,000) Gross profit 22,500 Operating expenses Depreciation expense *$ 6, 100 Other expenses 4,700 Total operating expense 10,800 Income before taxes 11,700 Income tax expense 2,800 Net income $ 8,900 a. No dividends are declared or paid in 2018. b. Issued additional stock for $8,300 cash in 2018. c. Purchased equipment for cash in 2018; no equipment was sold in 2018. 1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2018 Net Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities $ 0 Cash flows from investing activities $ 0 Cash flows from financing activities Saved MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Year Ended December 31, 2018 Net Income Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities 0 Cash flows from investing activities $ 0 Cash flows from financing activities 0 $ $ 0 Cash balance at beginning of year Cash balance at end of year $