Exercise $16-13$

Indirect: Preparing statement of cash flows

P$2$ P$3$

Use the following information to prepare a statement of cash flows for the current year using the indirect method. Comparative Balance Sheet At December $31$ Current Year Prior Year Cash.............................................................$ $30,400$ $ $30,550$ Accounts receivable, net.............. $10,05012,150$ Inventory............................................ $90,10070,150$ Total current assets..................................$\mathrm{.}130,550112,580$ Equipment............................................. $49,90041,500$ Accum, depreciation$-$Equipment $(22,500)(15,300)$ Total assets........................................ $ $157,950$ $ $139,050$ Liabilities and Equity Accounts payable................. $ $23,900$ $ $25,400$ Salaries payable $500600$ Total current liabilities.......... $24,40026,000$ Equity Common stock, no par value........ $ $110,000100,000$ Retaind earnings............ $23,55013,050$ Total liabilities and equity...... $ $157,950$ $ $139,050$ Income Statement For Current Year Ended December $31$ Sales........................................................................ $ $45,575$ Cost of goods sold............ $(18,950)$ Gross profit........ $26,625$ Salaries expense....... $5,550$ Depreciation expense....... $7,200$ Income before taxes....... $13,875$ Income tax expense....... $3,375$ Net income.......... $ $10,500$ Additional Information on Current$-$Year Transactions a$.$ No dividends are declared or paid. b$.$ Issued addional stock for $$10,000$ cash c$.$ Purchased equipment for cash; no equipment was sold