Prior Year MONTGOMERY INC Comparative Balance Sheets December 31 Current Year Assets Cash $ 53, 100 Accounts receivable, net 18,300 Inventory 164, 000 Total current assets 235, 400 Equipment 90, 800 Accum. depreciation Equipment (41,000) Total assets $285,200 Liabilities and Equity Accounts payable $ 43,500 Salaries payable 700 Total current liabilities 44,200 Equity Common stock, no par value 208,600 Retained earnings 32,400 Total liabilities and equity $285,200 $ 53,400 22,700 131,300 207, 400 77,600 (28,600) $256, 400 $ 47,600 800 48,400 190,600 17,400 $256, 400 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 65, 300 Cost of goods sold (27, 100) Gross profit 38, 280 Operating expenses Depreciation expense $12,400 Other expenses 8, 100 Total operating expense 20, see Income before taxes 17, 700 Income tax expense 2, 700 Net income $ 15,000 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $18,000 cash. c. Purchased equipment for cash; no equipment was sold. MONTGOMERY, INC Statement of Cash Rows (indirect Method) For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations Income statement items not affecting cash Changes in current operating assets and labilities Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year