E12-7 Preparing and Evaluating a Simple Statement of Cash Flows (Indirect Method) [LO 12-1, LO 12-2, LO 12-5]

Suppose the income statement for Goggle Company reports $151 of net income, after deducting depreciation of $21. The company bought equipment costing $130 and obtained a long-term bank loan for $136. The companys comparative balance sheet, at December 31, is presented here.

2. Prepare a statement of cash flows using the indirect method.

GOGGLE 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 $ 151 Changes in Current Assets and Current Liabilities Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable 151 Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Equipment Purchased x 0 Net Cash Provided by Investing Activities Cash Flows from Financing Activities: Decrease in Salaries and Wages Payable X 0 Net Cash Provided by Financing Activities Net Increase in Cash Cash, Beginning of Current Year Cash, End of Current Year S 0