PA12-4 Preparing and Interpreting a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 124, LO 125) Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with aditional information. CurrentPrevious Year Year Balance Sheet at December 31 Cash Accounts Receivable Equipment Accumulated Depreciation-Equipment(1,480) 1,240) 6,180 4,160 1,730 4900 890 5,390 $10,980 $9,550 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 710 1,200 750 500 4,900 2,200 510 1,600 4,900 3,260 $10,980 $9,550 Income Statement $39,700 37,200 240 1,200 Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense Net Income $ 1,060 Additional Data a. Bought new hockey equipment for cash, $490 b. Borrowed $1,100 cash from the bank during the year c. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was 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.) HEADS UP COMPANY Statement of Cash Flows or the Year Ended Decerm Forthe Tear En 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