QS 12-19 Indirect: Preparing statement of cash flows LO P1, P2, P3 MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash s 57,800 57,900 Accounts receivable. 14,300 17,600 net Inventory 128,200 200,300 71,000 101,700 177,200 60,200 Total current assets Equipment Accum. depreciation- Equipment (32,100) (22,200) $239,200 $215,200 Total assets Liabilitios and Equity Accounts payable Salaries payable 34,200 s 36,900 600 800 Total current 34,800 37,700 liabilities Equity Common stock, no par 172,900 160,100 value Retained earnings 31,500 17,400 Total liabilities and $239,200 $215,200 equity MONTGONERY INC. Income Statement For Year Ended December 31, 2018 61,800 Sales Cost of goods sold Gross profit Operating (25,600) 36,200 expenses Depreciation $9,900 expense Other expenses 7,700 Total operating 17,600 expense Income before 18,600 taxes Income tax 4,500 xpense 14,100 Net income Additional Information a No dividends are declared or paid in 2018. b. Issued additional stock for $12.800 cash in 2018. c. Purchased equipment for cash in 2018; no equipment was sold in 2018. Additional Information a. No dividends are declared or paid in 2018. b. Issued additional stock for $12,800 cash in 2018. c. Purchased equipment for cash in 2018; no equipment was sold in 2018. 1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, 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, 2018 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 Depreciation expense Decrease in accounts receivable Increase in inventory Decrease in accounts payable Decrease in salaries payable S Cash flows from investing activities Cash paid for equipment Cash flows from financing activities Cash received from stock issuande Net cash provided by financing activities 0 S 0 Cash balance at beginning of year Cash balance at end of year S 0