Prior Year MONTGOMERY INC. Comparative Balance Sheets At December 31 Current Year Assets Cash $ 30,400 Accounts receivable, net 10,050 Inventory 90,100 Total current assets 130,550 Equipment 49,900 Accum. depreciation-Equipment (22,500) Total assets $157,950 Liabilities and Equity Accounts payable $ 23,900 Salaries payable Total current liabilities 24,400 Equity Common stock, no par value 110,000 Retained earnings 23,550 Total liabilities and equity $157,950 $ 30,550 12,150 70,150 112,850 41,500 (15, 300) $ 139,050 $ 25,400 500 600 26,000 100,000 13,050 $ 139,050 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 45,575 Cost of goods sold (18,950) Gross profit 26,625 Salaries expense 5,550 Depreciation expense 7,200 Income before taxes 13,875 Income tax expense 3,375 Net income $ 10,500 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $10,000 cash. c. Purchased equipment for cash; no equipment was sold. X Answer is not complete. MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income $ 10,500 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Depreciation expense 7,200 > Changes in current operating assets and liabilities Decrease in accounts receivable Increase in inventory Decrease in accounts payable Decrease in salaries payable olololo 2,100 (19,950) (1,500) (100) $ (1,750) Net cash used in operating activities Cash flows from investing activities Cash paid for equipment (8,400) $ (8,400) Cash flows from financing activities Cash received from stock issuance 10,000 Olol $ $ Net cash provided by financing activities Net decrease in cash Cash balance at beginning of year Cash balance at end of year 10,000 (150) 30,550 30,400 $