MONTGOMERY INC. Comparative Balance Sheets December 31 Prior Year Current Year Assets $ 55,900 15,400 89,000 160,300 52,700 (19,400) $ 55,600 12,500 112,100 180,200 62,100 (28,100) Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment $214,200 $193,600 Total assets Liabilities and Equity Accounts payable Salaries payable $ 32,200 $ 29,900 500 700 Total current liabilities 30,400 32,900 Equity Common stock, no par value Retained earnings 156,300 27,500 145,500 15,200 $214,200 $193,600 Total liabilities and equity MONTGOMERY INC. Income Statement For Current Year Ended December 31 $ 54,000 (22,400) 31,600 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 8,700 6,700 other expenses Total operating expense 15,400 16,200 Income before taxes 3,900 $ 12,300 Income tax expense Net income Additional Information on Current-Year Transactions a. No dividends are declared or pald. b. Issued additional stock for $10,800 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 Cash balance at beginning of year Cash balance at end of year