MONTGOMERY INCORPORATED
Comparative Balance Sheets
At December 31	Current Year	Prior Year
Assets
Cash	$ 57,800	$ 57,900
Accounts receivable, net	14,300	17,600
Inventory	128,200	101,700
Total current assets	200,300	177,200
Equipment	71,000	60,200
Accumulated depreciationEquipment	(32,100)	(22,200)
Total assets	$ 239,200	$ 215,200
Liabilities and Equity
Accounts payable	$ 34,200	$ 36,900
Salaries payable	600	800
Total current liabilities	34,800	37,700
Equity
Common stock, no par value	172,900	160,100
Retained earnings	31,500	17,400
Total liabilities and equity	$ 239,200	$ 215,200

MONTGOMERY INCORPORATED
Income Statement
For Current Year Ended December 31
Sales	$ 61,800
Cost of goods sold	(25,600)
Gross profit	36,200
Salaries expense	7,700
Depreciation expense	9,900
Income before taxes	18,600
Income tax expense	4,500
Net income	$ 14,100

Additional Information on Current-Year Transactions

1. No dividends are declared or paid.
2. Issued additional stock for $12,800 cash.
3. 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, INCORPORATED 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 used in operating activities: Income statement items not affecting cash Changes in current operating assets and liabilities Cash flows from investing activities Cash flows from financing activities