PA12-3 Preparing a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 12-4, LO 12-5) XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Previous Year Balance sheet at December 31 Cash $ 32,330 $ 27,250 Accounts Receivable 33,400 27,200 Inventory 39,400 37,200 Equipment 109,000 92,000 Accumulated Depreciation Equipment (28,400) (24,200) Total Assets $185,730 $159,450 Accounts Payable $ 34,400 $ 26,200 Salaries and Wages Payable 1,130 1,250 Note Payable (long-term) 30,800 36,000 Common Stock 83,800 71,800 Retained Earnings 35,600 24,200 Total Liabilities and Stockholders' Equity $185,730 $159,450 Income Statement Sales Revenue $112,000 Cost of Goods Sold 66,000 Other Expenses 34,600 Net Income $ 11,400 S Additional Data: a. Bought equipment for cash, $17,000. b. Paid $5,200 on the long-term note payable. C. Issued new shares of stock for $12,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $4,200; salaries and wages, $19,200; taxes, $5,200; utilities. $6,000. 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. Required: 1. Prepare the statement of cash flows for the current year ended December 31 using the Indirect method. (Amounts to be deducted should be indicated with a minus sign.) $ 11,400 XS SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense $ Increase in Accounts Receivable Increase in Inventory Increase in Accounts Payable Decrease in Salaries and Wages payable Cash Balance, December 31 4,200 5 4,200 15,600 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Cash Balance, December 31 Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash payments on Notes Payable (long-term) Cash Receipts from Issuing Stock 0 0 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 $ 0