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: Current Year Previous Year ok nt 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 $ 75,000 17,400 25,600 235,000 (69,000) $ 284,800 $ 8,600 2,000 63,000 112,000 98,400 $ 284,000 $ 78,200 23,000 23,000 156,000 (51,000) $ 229,200 $ 20,200 1,000 81,000 76,000 51,000 $ 229,200 $ 218,000 96,000 69,000 $ 53,000 Additional Data: a. Bought equipment for cash, $79,000. b. Pald $18,000 on the long-term notes payable. C. Issued new shares of stock for $36,000 cash. d. Dividends of $5,600 were paid in cash. e. Other expenses included depreciation, $18,000; salaries and wages, $23,000; taxes, $28,000. 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 Cash Flows from Operating Activities: . ok Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities nt Changes in Current Assets and Current Liabilities Cash Flows from Investing Activities: Cash Flows from Financing Activities