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 Inventory Equipment Accumulated Depreciation-Equipment Total Assets Salaries and Wages Payable Current Year Previous Year $ 31,850 33,000 $ 26,750 27,000 39,000 37,000 106,000 (28,000) $181,850 $ 34,000 $ 156,750 $ 26,000 90,000 (24,000) Accounts Payable 1,050 1,150 Notes Payable (long-term). 29,000 34,000 Common Stock 82,600 71,600 Retained Earnings 35,200 24,000 Total Liabilities and Stockholders' Equity $181,850 $ 156,750 25 Income Statement Service Revenue $110,000 65,000 33,800 $ 11,200 Cost of Goods Sold Other Expenses Net Income Additional Data: a. Bought equipment for cash, $16,000. b. Paid $5,000 on the long-term notes payable. c. Issued new shares of stock for $11,000 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $4,000; salaries and wages, $19,000; taxes, $5,000; utilities, $5,800. 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.) Ook 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: Changes in Current Assets and Current Liabilities Increase in Accounts Receivable. Increase in Inventory int (6,000) Saved $ 11,200. rences Increase in Accounts Payable Decrease in Salaries and Wages payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash payments on Notes Payable (long-term) Cash Receipts from Issuing Stock . (6,000) 5,200 0 Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31 0 $