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 Current Previous Year Year Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment $60,000 $ 65,000 20,000 20,000 223,000 150,000 Accumulated Depreciation-Equipment (60,000) (45,000) 15,000 22,000 $260,000 $210,000 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 8,000 $ 19,000 1,000 75,000 70,000 45,000 2,000 60,000 100,000 90,000 $260,000 $210,000 Income Statement Sales Revenue Cost of Goods Sold Other Expenses $200,000 90,000 60,000 Net Income $ 50,000 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. 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