PA12-4 Preparing and Interpreting a Statement of Cash Flows (Indirect Method) Heads Up Company was started several years ago by two hockey instructors. The company comparative balance sheets and income statement follow, along with additional information. Current Year Previous Year Balance Sheet at December 31 Cash $ 6,300 $4,000 Equipment Accounts Receivable Accumulated Depreciation-Equipment Total Assets 900 1,750 5,500 5,000 (1,500) (1,250) $11,200 $9,500 Accounts Payable $ 500 $1,000 Salaries and Wages Payable 500 750 Notes Payable (long-term) 1,700 500 Common Stock 5,000 5,000 Retained Earnings 3,500 2,250 Total Liabilities and Stockholders' Equity $11,200 $9,500 Income Statement Service Revenue $37,500 Salaries and Wages Expense 35,000 Depreciation Expense 250 Income Tax Expense 1,000 Net Income $ 1,250