Prior Year MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Current Year Assets Cash $ 33,200 Accounts receivable, net 12,100 Inventory 108,500 Total current assets 153,800 Equipment 60,100 Accumulated depreciation-Equipment (27,100) Total assets $ 186,800 Liabilities and Equity Accounts payable $ 28,880 Salaries payable 600 Total current liabilities 29,400 Equity Common stock, no par value 130,000 Retained earnings 27,400 Total liabilities and equity $ 186,800 $ 33,400 14,700 84,900 133,000 50,200 (18,500) $ 164,700 $ 30,700 700 31,400 118,100 15, 200 $ 164,700 MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales $ 53,500 Cost of goods sold (22,200) Gross profit 31,300 Salaries expense 6,600 Depreciation expense 8,600 Income before taxes 16,100 Income tax expense 3,900 Net income $ 12,200 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $11,900 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, INCORPORATED 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 used in operating activities: Income statement items not affecting cash Changes in current operating assets and liabilities S 0 Cash flows from investing activities S 0 Cash flows from financing activities S 0 S 0 Cash balance at beginning of year Cash balance at end of year S 0