Question: Computer Service and Repair was started five years ago by two college roommates. The company's comparative statements of financial position and statement of earnings are

 Computer Service and Repair was started five years ago by two

Computer Service and Repair was started five years ago by two college roommates. The company's comparative statements of financial position and statement of earnings are presented below, along with additional information. Current Year Prior Year $12, 625 Statement of Financial Position at December 31 Cash Accounts receivable Prepaid expenses Equipment Accumulated depreciation 650 125 0 $ 9, 075 1,450 850 650 (125) $11, 900 $ 500 225 4,000 7,175 $11, 900 $12, 800 $ 1,850 Wages payable Short-term note payable Contributed capital Retained earnings 4,000 6,950 $12, 800 Statement of Earnings for Current Year Service revenue Depreciation expense Salaries expense Other expenses Net earnings $49,000 125 37,500 11, 150 $ 225 Additional Data: 1. Prepaid expenses relate to rent paid in advance. 2. Other expenses were paid in cash. 3. Purchased equipment for $650 cash at the beginning of the current year and recorded $125 of depreciation expense at the end of the current year. 4. At the end of the current year, the company signed a short-term note payable to the bank for $225. Required: Prepare the operating activities section of the statement of cash flows for Computer Service and Repair using the indirect method. (Negative answers should be indicated by a minus sign.)

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