UT 5 Heads Up Company was started several years ago by two hockey instructors. The company's comparative balance sheets and income statement are provided below, along with additional information. Current Year Prior Year 7.89/10 points awarded Balance Sheet at December 31 Cash Accounts Receivable Equipment Less: Accumulated Depreciation $ 6,000 1,800 5,500 (1,580) $ 4, eee 1,750 5,eee (1,250) Scored $ 11,000 $ 9,500 S eBook Accounts Payable Wages Payable Long-Term Bank Loan Payable Contributed Capital Retained Earnings 500 500 1,500 5 , 3,500 $ 1,800 750 see 5,eee 2,250 Print $ 11,000 $ 9,5ee References Income Statement (current year) ) Lessons Revenue Wages Expense Depreciation Expense Income Tax Expense $ 37,500 35,000 250 1,888 Net Income $ 1,250 Additional notes: a. Bought new hockey equipment for cash, $500. b. b. Borrowed $1,000 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 this expense was fully paid in cash. Required: 1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) $ 1.250 HEADS UP COMPANY 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 Decrease in accounts receivable Depreciation expense Decrease in accounts payable Decrease in wages payable $ 750 250 (500) (250) 1,500 Net cash provided by operating activities Cash flows from investing activities: Cash payments to purchase equipment Cash proceeds from bank loan Net cash provided by investing activities Cash flows from financing activities: Cash payments on long-term note (1,000) X 1,000 0 X x (1,000) X ) Net cash provided by financing activities (1.000) Net increase in cash during the year 2.000 Cash balance, January 1 4,000 Cash balance, December 31 $ 6.000 "Red best indicates no response was expected in a cell or a formula-based calculation is incorrect: no points deducted