Comparative Balance Sheets December 31 Current Year Prior Year $ $ 58,200 18,300 164,100 240,600 90,900 (41,000) 290,500 58,100 22,300 128,800 209,200 76,200 (28,100) 257,300 $ $ Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity $ $ 43,600 900 44,500 46,600 1,100 47,700 202,500 43,500 290,500 185,700 23,900 257, 300 $ $ $ 83,500 (34,600) 48,900 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 12,900 Other expenses 10,300 Total operating expense Income before taxes Income tax expense Net income 23, 200 25,700 6,100 19,600 $ Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $16,800 cash. c. Purchased equipment for cash; no equipment was sold. 1. Use the above information to prepare a statement of cash flows for the current year using the Indirect method. (Amounts to be deducted should be indicated by a minus sign.) MONTGOMERY, INC. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities Cash balance at beginning of year Cash balance at end of year