MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Current Year Prior Year Assets Cash $ 55,600 $ 55,900 Accounts receivable, net 12,500 112,100 180,200 15,400 Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value 62,100 (28,100) $ 214,200 $ 29,900 500 30,400 156,300 27,500 $ 214,200 89,000 160,300 52,700 (19,400) $ 193,600 $ 32,200 700 32,900 145,500 15,200 $ 193,600 Retained earnings Total liabilities and equity MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Salaries expense Depreciation expense Income before taxes. Income tax expense Net income $ 54,000 (22,400) 31,600 6,700 8,700 16,200 3,900 $ 12,300 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $10,800 cash. c. Purchased equipment for cash; no equipment was sold. At December 31 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accumulated 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 MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold. Gross profit Salaries expense Depreciation expense Income before taxes Income tax expense Net income $ 54,000 (22,400) 31,600 6,700 8,700 16,200 3,900 $ 12,300 Current Year $ 55,600 12,500 112,100 180,200 62,100 (28,100) $ 214,200 $ 29,900 500 30,400 Prior Year $ 55,900 15,400 89,000 160,300 52,700 (19,400) $ 193,600 $ 32,200 700 32,900 156,300 145,500 27,500 15,200 $ 214,200 $193,600 Additional Information on Current-Year Transactions a. No dividends are declared or paid. 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 meth deducted should be indicated by a minus sign.) Cash flows from operating activities MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Adjustments to reconcile net income to net cash used in operating activities: 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