Safeway Service and Repair was started five years ago by two college roommates. The company's comparative balance sheets and income statement are presented below, along with additional information.

Additional data:

a. Prepaid expenses relate to rent paid in advance.

b. Other expenses were paid in cash.

c. Purchased equipment for $ 700 cash at the beginning of the current year and recorded $100 of depreciation expense at the end of the current year.

d. At the end of the current year, the company signed a short-term note payable to the bank for $ 500.

Required:

Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.

Balance Sheet at December 31 Current Year Prior Year Cash Accounts receivable Prepaid expenses Equipment Accumulated depreciation $3,100 800 180 $ 3,600 1,100 120 700 (100) $ 5,420 $ 840 500 1,400 2,680 $ 5,420 $4,080 $ 200 Wages payable Short-term note payable Common stock Retained earnings 1,400 2,480 $4,080 Income Statement Service revenue Depreciation expense Salaries expense Other expenses Net income $37,450 100 33,000 4,200 $ 200