MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Current Year Prior Year Assets Cash $ 55,900 $ 56,300 Accounts receivable, net 13,800 16,800 Inventory 123,700 97,100 Total current assets 193,400 170,200 Equipment 68.500 57,500 accumulated depreciation Equipment (31.000) (21,200) Total assets $ 230,900 $ 206,500 Liabilities and Equity Accounts payable $ 33,000 $ 35,200 Salaries payable 600 800 Total current liabilities 33,600 36,000 Equity Common stock, no par value 165,900 153, 100 Retained earnings 31,400 17,400 Total liabilities and equity $ 230,900 $ 206,500 MONTGOMERY INCORPORATED Income Statement Por Current Year Ended December 31 Sales $ 61,200 Coat of goods sold (25.400) Gross profit 35,800 Salaries expense 7,500 Depreciation expense 9,800 Income before taxes 18,500 Income tax expense 4.500 Net income 5. 14.000 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $12,800 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.) 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, INCORPORATED 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 used in operating activities 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 5 $ 0 0 Cash balance at beginning of year Cash balance at end of year $ 0