Suppose the income statement for Goggle Company reports $95 of net income, after deducting depreciation of $35. The company bought equipment costing $60 and obtained a long-term bank loan for $70. The companys comparative balance sheet, at December 31, is presented under Tab 1 below.

Required:

1. 1. Calculate the change in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+ for increase and for decrease).
2. 2. Prepare a statement of cash flows using the indirect method.
3. 6. Are the cash flows typical of a start-up, healthy, or troubled company?

Required 1 Required 2 Required 6 Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) GOGGLE COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income S 95 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation S 35 Changes in Current Assets and Current Liabilities: Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable (100) 125 40 195 Cash Flows from Investing Activities Equipment Purchased (60) (60) Cash Flows from Financing Activities: 0 S 0 Required 1 Required 2 Required 6 Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) GOGGLE COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income S 95 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation S 35 Changes in Current Assets and Current Liabilities: Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable (100) 125 40 195 Cash Flows from Investing Activities Equipment Purchased (60) (60) Cash Flows from Financing Activities: 0 S 0