Prior Year MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year Assets Cash $ 34,500 Accounts receivable, net 10,000 Inventory 89,600 Total current assets 134,100 Equipment 49,600 Accum. depreciation-Equipment (22,400) Total assets $ 161,300 Liabilities and Equity Accounts payable $ 23,800 Salaries payable 400 Total current liabilities 24,200 Equity Common stock, no par value 117,100 Retained earnings 20,000 Total liabilities and equity $161,300 $ 34,900 12,400 71,700 119,000 42,400 (15,600) $145,800 $ 25,900 500 26,400 108,500 10,900 $145,800 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 39,600 Cost of goods sold (16,400) Gross profit 23,200 Operating expenses Depreciation expense $ 6,800 other expenses 4,900 Total operating expense 11,700 Income before taxes 11.500 Income tax expense 2,400 Net Income $ 9,100 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $8,600 cash. c. Purchased equipment for cash; no equipment was sold. 1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (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 $ 0 Cash flows from investing activities 0 Cash flows from financing activities $ $ Cash balance at beginning of year Cash balance at end of year $ 0