QS 12-19 Indirect: Preparation of statement of cash flows LO P1, P2, P3

MONTGOMERY INC. Comparative Balance Sheets December 31, 2016 and 2015
		2016				2015
Assets
Cash	$	63,500			$	63,900
Accounts receivable, net		18,100				22,100
Inventory		162,300				127,700
Total current assets		130,550				112,850
Equipment		89,900				75,600
Accum. depreciationEquipment		(40,500	)			(28,000	)
Total assets	$	293,300			$	261,300
Liabilities and Equity
Accounts payable	$	43,100			$	46,500
Salaries payable		800				1,000
Total current liabilities		24,400				26,000
Equity
Common stock, no par value		210,000				192,000
Retained earnings		39,400				21,800
Total liabilities and equity	$	293,300			$	261,300

MONTGOMERY INC. Income Statement For Year Ended December 31, 2016
Sales			$	77,200
Cost of goods sold				(32,100	)
Gross profit				45,100
Operating expenses
Depreciation expense	$	12,500
Other expenses		9,400
Total operating expense				21,900
Income before taxes				23,200
Income tax expense				5,600
Net income			$	17,600

Additional Information

a.	No dividends are declared or paid in 2016.
b.	Issued additional stock for $18,000 cash in 2016.
c.	Purchased equipment for cash in 2016; no equipment was sold in 2016.

1)

Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2016, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC.Statement of Cash Flows (Indirect Method)For Year Ended December 31, 2016 Cash flows from operating activities Net Income Adjustments to reconcile net income to net cash provided by operations: Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Net increase in cash Cash balance at beginning of year Cash balance at end of year