study packet 1

Prior Year MONTGOMERY INC. Comparative Balance Sheets December 31 Current Year Assets Cash $ 32,300 Accounts receivable, net 19,600 Inventory 95,100 Total current assets 138,000 Equipment 52,700 Accum. depreciation-Equipment (23,800) Total assets $166,900 Liabilities and Equity Accounts payable $ 25,300 Salaries payable 500 Total current liabilities 25,800 Equity Common stock, no par value 117,300 Retained earnings 23, 800 Total liabilities and equity $166,900 $ 32,400 13,000 75,109 120,500 44,500 (16,500) $148,500 $ 27,400 600 28,000 107,400 13,109 $148,500 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 46,200 Cost of goods sold (19,200) Gross profit 27,000 Operating expenses Depreciation expense $ 7,300 Other expenses 5,600 Total operating expense 12,900 Income before taxes 14,100 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 46,200 Cost of goods sold (19,200) Gross profit 27,000 Operating expenses Depreciation expense $ 7,300 Other expenses 5,666 Total operating expense 12,900 Income before taxes 14,100 Income tax expense 3,400 Net income $ 10,700 Additional Information on Current-Year Transactions a. No dividends are declared or paid b. Issued additional stock for $9.900 cash c. Purchased equipment for cash, no equipment was sold. 1. Use the above information to prepare a statement of cash flows for the current year using the Indirect method (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC Statement of CS Flows direct Motho) For Current Year Ended December 31 Cash flows from operating activities MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income 10,700 Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities $ 10,700 Cash flows from investing activities $ 0 Cash flows from financing activities