PA12-4 Preparing and interpreting a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 12. 4, LO 12-5) Cash 1,850 + Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement follow, along with additional information Current Year Balance sheet at December 31 Previous Year $ 6,300 $ 4,400 Accounts Receivable 950 Equipment 6.050 5,500 Accumulated Depreciation Equipment (1.600) 2.300) Total Asset $11,700 $10,450 Accounts Payable 650 $ 1,200 Salaries and Wages Payable 450 750 Note Payable (long-ter) 1.600 Common Stock 5,500 5,500 Retained Earnings 2.500 2,500 Total liabilities and stockholders' Equity $11.700 $10,450 Income Statement Service Revenue $38,500 Salaries and Wages Expense 36,000 Depreciation Expense 300 Income Tax Expense 1,200 Net Income S 1,000 $ es 500 Additional Data: a. Bought new hockey equipment for cash. $550. 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 For the Year Ended December 31 Cash Flows from Operating Activities: Adjustments to Reconcile Not Income to Net Cash Provided by Operating Activities: Cash Flows from investing Activities Cash Flows from Financing Activities