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: Balance Sheet at December 31 Cash Accounts Receivable Merchandise Inventory Property and Equipment Less: Accumulated Depreciation Accounts Payable Wages Payable Note Payable, Long-Term Contributed Capital Retained Earnings Income Statement (Current year) Sales Cost of Goods Sold Other Expenses Net Income Current Year Prior Year $ 32,400 $ 29,100 41,000 33,900 47,250 39,600 141,750 128,000 (40,350) (32,000) $222,050 $198,600 $ 45,200 $ 32,100 960 1,550 31,600 45,100 96,300 79,600 47,990 40,250 $222,050 $198,600 $137,000 79,460 49,800. $ 7,740 Additional Data: a. Bought equipment for cash, $13,750. b. Paid $13,500 on the long-term note payable. c. Issued new shares for $16,700 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $8,350; wages, $23,200; taxes, $7,400; other, $10,850. 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 year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign.) 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 Increase in merchandise inventory Increase in accounts receivable Increase in accounts payable Increase in accounts receivable Increase in accounts payable Decrease in wages payable Cash flows from investing activities: Cash payments to purchase equipment Cash flows from financing activities: Decrease in accounts receivable Net increase in cash during the year Cash balance, January 1 Cash balance, December 31 0 0 0 0 $ 0