SOFT TOUCH COMPANY
Statement of Cash Flows
For the Year Ended December 31
Cash Flows from Operating Activities:
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Cash Flows from Investing Activities:
Cash Flows from Financing Activities:

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Soft Touch Company was started several years ago by two golf instructors. The companys comparative balance sheets and income statement are presented below, along with additional information.

	Current Year			Previous Year
Balance Sheet at December 31
Cash	$	13,740		$	8,250
Accounts Receivable		2,400			3,600
Equipment		12,100			11,000
Accumulated DepreciationEquipment		(3,110	)		(2,600	)
	$	25,130		$	20,250
Accounts Payable	$	1,100		$	2,100
Salaries and Wages Payable		1,040			1,550
Note Payable (long-term)		3,100			1,000
Common Stock		11,000			11,000
Retained Earnings		8,890			4,600
	$	25,130		$	20,250
Income Statement
Service Revenue	$	75,400
Salaries and Wages Expense		68,500
Depreciation Expense		510
Income Tax Expense		2,100
Net Income	$	4,290

Additional Data:

a.	Bought new golf clubs using cash, $1,100.
b.	Borrowed $2,100 cash from the bank during the year.
c.	Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that Income Tax Expense was fully paid in cash.

Required:
1.	Prepare the statement of cash flows for the current year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)