The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. Current Year Prior Year $ 50,000 80,000 60,000 110,000 (30,000) $270,000 $ 72,000 70,000 65,000 60,000 (15,000) $252,000 Balance Sheet Assets Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Total assets Liabilities: Accounts payable Salaries and Wages Payable Notes payable, long-term Stockholders' Equity: Common stock Retained earnings Total liabilities and stockholders' equity Income Statement Sales Cost of goods sold Depreciation expense Other expenses Net income $ 10,000 2,000 50,000 $ 12,000 1,000 60,000 100,000 108,000 $270,000 80,000 99,000 $252,000 $200,000 110,000 15,000 50,000 $ 25,000 Other information from the company's records includes the following: Bought equipment for cash, $50,000. Paid $10,000 on long-term note payable. Issued new shares of common stock for $20,000 cash. Cash dividends of $16,000 were declared and paid to stockholders. Accounts Payable arose from inventory purchases on credit. Income tax expense ($4,000) and interest expense ($3,000) were paid in full at the end of both years and are included in Other Expenses. a. Prepare the statement of cash flows using the indirect method. Include any supplemental disclosures. (Enter any deductions and cash outflows as a negative value.) IS 25,000 WICKERSHAM BROTHERS Inc. Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense Changes in current assets and current liabilites: Accounts Receivable Inventories Accounts Payable Salaries and Wages Payable 15,000 (10,000) (2,000) 1,000 $ 29,000 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Equipment IS (50,000) | S (50,000) Net Cash Provided by Investing Activities Cash Flows from Financing Activities: Payments on long-term debt Common Stock Payment of cash dividends S (10,000) 20,000 Net Cash Provided by Financing Activities $ 10,000 (10,000) Changes in current assets and current liabilites: Accounts Receivable Inventories Accounts Payable Salaries and Wages Payable (2,000) 1,000 $ 29,000 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Equipment $ (50,000) $ (50,000) Net Cash Provided by Investing Activities Cash Flows from Financing Activities: Payments on long-term debt Common Stock Payment of cash dividends | $ (10,000) 20,000 $ 10,000 Net Cash Provided by Financing Activities Net Decrease in Cash and Cash Equivalents Cash and Cash Equivalents, beginning of period Cash and Cash Equivalents, end of period Supplemental Disclosures: 72,000 72,000 $