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 Prior Year Balance Sheet at December 31 Cash Accounts Receivable Merchandise Inventory Property and Equipment Less: Accumulated Depreciation $ 50,720 $ 34,800 42,850 36,100 49,750 43,700 164,000 138,000 (39,600) (34,500) $267,720 $218,100 Accounts Payable Wages Payable Note Payable, Long-Term Contributed Capital Retained Earnings $ 40,050 1,910 40,200 108,000 77,560 $ 30,700 2,400 52,900 82,100 50,000 $ 267,720 $218,100 Income Statement (Current year) Sales Cost of Goods Sold Other Expenses $165,500 95,990 41,950 $ 27,560 Net Income Additional Data: a. Bought equipment for cash, $26,000. b. Paid $12,700 on the long-term note payable. c. Issued new shares for $25,900 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $5,100; wages, $22,600; taxes, $7,150; other, $7,100. 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 accounts receivable 5,100 6,750 X 6,050 X Increase in merchandise inventory Increase in accounts payable Decrease in wages payable 9,350 490 x 27,740 27,740 26,000 X Cash flows from investing activities: Cash proceeds from bank loan Cash payments on long-term note Net cash used in investing activities 26,000 rach flowc from financing activities: 27,740 x 27,740 26,000 X Cash flows from investing activities: Cash proceeds from bank loan Cash payments on long-term note Net cash used in investing activities Cash flows from financing activities: Cash receipts from issuing shares 26,000 X 0 x Net increase in cash during the year Cash balance, January 1 $ Cash balance, December 31 0 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted