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MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year Prior Year Assets Cash $ 30,400 $ 30,550 Accounts receivable, net 10,050 12,150 Inventory 90,100 70,150
MONTGOMERY INC. Comparative Balance Sheets December 31 | ||||||||
Current Year | Prior Year | |||||||
Assets | ||||||||
Cash | $ | 30,400 | $ | 30,550 | ||||
Accounts receivable, net | 10,050 | 12,150 | ||||||
Inventory | 90,100 | 70,150 | ||||||
Total current assets | 130,550 | 112,850 | ||||||
Equipment | 49,900 | 41,500 | ||||||
Accum. depreciationEquipment | (22,500 | ) | (15,300 | ) | ||||
Total assets | $ | 157,950 | $ | 139,050 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 23,900 | $ | 25,400 | ||||
Salaries payable | 500 | 600 | ||||||
Total current liabilities | 24,400 | 26,000 | ||||||
Equity | ||||||||
Common stock, no par value | 110,000 | 100,000 | ||||||
Retained earnings | 23,550 | 13,050 | ||||||
Total liabilities and equity | $ | 157,950 | $ | 139,050 | ||||
MONTGOMERY INC. Income Statement For Current Year Ended December 31 | ||||||
Sales | $ | 45,575 | ||||
Cost of goods sold | (18,950 | ) | ||||
Gross profit | 26,625 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 7,200 | ||||
Other expenses | 5,550 | |||||
Total operating expense | 12,750 | |||||
Income before taxes | 13,875 | |||||
Income tax expense | 3,375 | |||||
Net income | $ | 10,500 | ||||
Additional Information on Current-Year Transactions
- No dividends are declared or paid.
- Issued additional stock for $10,000 cash.
- 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.)
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