PB12-3 Preparing a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 12-4, LO 12-5)] Audio City, Inc, 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 Previous Year Current Year Balance Sheet at Decenber 31 s 60,e00 65,00e Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment 2e, 0e0 20,000 15,000 22,809 (69,800) (45,000) ok 223,00 150,009 Total Assets Accounts Payable Salaries and Hages Payable Note Payable (long-term) Common Stock int S 8,800 19,800 1,000 60,03078,000 2,000 75,000 1e0,000 98,890 12 45,000 Total Liabilities and Stockholders' Equity Income Statement s 200,6e 90,000 69,000 50,000 Sales Revenue Cost of Goods Sold Other Expenses Net Income Additional Data a Bought equipment for cash, $73,000 b. Paid $15,000 on the long-term note payable c Issued new shares of stock for $30,000 cash d. Dividends of $5,000 were paid in cash e Other expenses included depreciation, $15,000, salaries and wages, $20,000, taxes, $25,000 1 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.) K Prey 7 of 8 Next 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 INC. Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Income S 50,000 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities 50,000 Cash Flows from Investing Actvities Cash Flows from Financing Activities