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 11,700 Total operating expense 11,500 Income before taxes 2,400 Income tax expense $ 9, 100 Net income 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. 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