P12-2 (Algo) Preparing a Statement of Cash Flows (Indirect Method) LO12-1, 12-2, 12-4, 12-6 BGP Electrical Supply is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Prior Year Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Accrued wages expense Note payable, long-term Common stock and additional paid-in capital Retained earnings $ 37,700 33,300 43,000 122,600 (31,600) $205,000 $ 37,500 2,100 45,200 90,400 29,800 $205,000 $ 30,200 29, 300 38,700 101, 100 (25,600) $173,700 $ 28,800 2,300 51,000 73,400 18,200 $173,700 Income statement for current year Sales Cost of goods sold Other expenses Net income $126,000 76,000 38,400 $ 11,600 Additional Data: a. Bought equipment for cash, $21,500. b. Paid $5,800 on the long-term note payable. c. Issued new shares of stock for $17,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $6,000; wages, $20,600; taxes, $6,200; other, $5,600. f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash. BGP ELECTRICAL SUPPLY Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Adjustments to reconcile net income to net cash provided by operating activities: Cash flows from investing activities: Cash flows from financing activities