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 Balance Sheet at December 31 $ 35,090S 30,150 28,600 38,600 30,000106,000 Cash Accounts Receivable 36,200 42,200 Equipment Accumulated Depreciation-Equipment (31.200)(25,600) $212290$177,750 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 37.200 27,600 1,350 50,000 73,200 25,600 1,090 3.400 92,200 38,400 S212.290$177,750 Income Statement Sales Revenue Cost of Goods Sold Other Expenses $ 126,000 73,000 40,200 Net Income $ 12,800 Additional Data: a Bought equipment for cash, $24,000 b. Paid $6,600 on the long-term note payable c. Issued new shares of stock for $19,000 cash. d. No dividends were declared or paid e. Other expenses included depreciation, $5.,600 Salaries and wages, $20,600: taxes, $6,600, utilities, $7 400 t. 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 sian.i 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.) 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 0 Net Cash Provided by Operating Activities 0 Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities Cash payments on Notes Payable (long-term) Cash Receipts from Issuing Stock Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31