XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Previous Year Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Sales Revenue Cost of Goods Sold Other Expenses Net Income $ 34, 960 35, 800 41,800 127,000 (30, 800) $208, 760 $ 36, 800 1, 360 41, 600 91,000 38,000 $208, 760 $ 30,000 28, 400 38, 400 104,000 (25, 400) $175, 400 $ 27, 400 1,600 48,000 73,000 25, 400 $175, 400 $124, 000 72,000 39, 400 $ 12, 600 Additional Data: a. Bought equipment for cash, $23,000. b. Paid $6,400 on the long-term note payable. c. Issued new shares of stock for $18,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $5,400; salaries and wages, $20,400; taxes, $6,400: utilities. $7.200. f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were 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.) Answer is complete but not entirely correct. $ 12.600 XS SUPPLY 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: Depreciation Expense $ 5,400 Increase in Accounts Receivable (7,400) Increase in Inventory (3,400) Increase in Accounts Payable 9,400 Decrease in Salaries and Wages payable (240) Decrease in Salaries and Wages payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment (23,000) Cash Payments to Purchase Equipment X Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash payments on Notes Payable (long- (6.400) term) Cash Receipts from Issuing Stock 18,000 Cash Receipts from Issuing Stock 0 Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 3,760 16,360 (23,000) OOOOOO 11,600 4,960 30,000 $ 34,960