MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Current Year Prior Year Assets Cash $ 63,500 $ 63,900 Accounts receivable, net 18,100 22,100 Inventory 162,300 127,700 Total current assets 243,900 213,700 Equipment 89,900 75,600 Accumulated depreciation-Equipment (40,500) (28,000) Total assets $ 293,300 $ 261,300 Liabilities and Equity Accounts payable $ 43,100 $ 46,500 Salaries payable 800 1,000 Total current liabilities 43,900 47,500 Equity Common stock, no par value 210,000 192,000 Retained earnings 39,400 21,800 Total liabilities and equity $ 293,300 $ 261,300 MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales $ 77,200 Cost of goods sold (32,100) Gross profit 45, 100 Salaries expense 9,400 Depreciation expense 12,500 Income before taxes 23,200 Income tax expense 5,600 Net income $ 17,600 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $18,000 cash. c. Purchased equipment for cash; no equipment was sold. Answer is not complete. MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash used in operating activities: Income statement items not affecting cash Depreciation expense 17,600 12,500 O Changes in current operating assets and liabilities Increase in Inventory Decrease in accounts payable Decrease in salaries payable Decrease in accounts receivable SIOS (34,600) (3,400) (200) 4,000 (4.100) Net cash used in operating activities Cash flows from investing activities Cash paid for equipment (14, 300) (14.300) Net cash used in investing activities Cash flows from financing activities Cash received from stock issuance 18,000 18.000 Net cash used in investing activities Net decrease in cash Cash balance at beginning of your Cash balance at end of year els $ (400) (400)