PB12-3 (Algo) Preparing a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 12-4, LO 12- 5] Audio City, Incorporated, 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 below: Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income Additional Data: a. Bought equipment for cash, $74,000. b. Paid $15,500 on the long-term notes payable. c. Issued new shares of stock for $31,000 cash. d. Dividends of $5,100 were paid in cash. Current Year Previous Year $ 62,600 15,400 $ 67,200 20,500 22,600 225,000 (61,500) $ 264,100 $ 8,100 2,100 60,500 102,000 20,500 151,000 (46,000) $ 213,200 $ 19,200 1,000 76,000 71,000 91,400 46,000 $ 213,200 $ 264,100 $ 203,000 91,000 61,500 $ 50,500 e. Other expenses included depreciation, $15,500; salaries and wages, $20,500; taxes, $25,500. f. Accounts Payable includes only inventory purchases made on credit. Because a liability relating to taxes does not exist, assume that they 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 by a minus sign.) AUDIO CITY INCORPORATED Statement of Cash Flows For the Year Ended December 31