QS 12-19 Indirect: Preparing statement of cash flows LO P1, P2, P3 MONTGOMERY INC Comparative Balance Sheets December 31, 218 and 217 2017 2018 AssetS Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets $ 56, 900 $ 57,100 14, 100 17,300 126, 406 70, 000 $235, 70 $. 33,70 197,400 174,400 59, 200 $211, 800 $ 36,200 (31,700) (21, 800) Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity 600 800 170, 00 31,400 $235, 70 157,406 17,400 $211, 800 MONTGOMERY INC Income Statement For Year Ended December 31, 218 Sales Cost of goods sold Gross profit Operating expenses $ 61,500 (25, 500) 36, 000 Depreciation expense $ 9,900 7, 6 Other expenses Total operating expense Income before taxes Income tax expense Net income 17,500 4,500 $ 14,000 a. No dividends are declared or paid in 2018. b. Issued additional stock for $12,600 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 Adjustments to reconcile net income to net cash provided by operations: Changes in current operating assets and liabilities 0 Cash flows from investing activities 0 Cash flows from financing activities 0 0 Cash balance at beginning of year Cash balance at end of year 0