PA$12-4($Algo$)$ Preparing and Interpreting a Statement of Cash Flows $($Indirect Method$)[$LO $12-2,$ LO $12-3,$ LO $12-4,$ LO $12-5]$

Heads Up Company was started several years ago by two hockey instructors. The company$$s comparative balance sheets and income statement follow, along with additional information.

Current Year Previous Year

Balance Sheet at December $31$

Cash $ $6,240$ $ $4,280$

Accounts Receivable $9201,790$

Equipment $5,7205,200$

Accumulated Depreciation$$Equipment $(1,540)(1,270)$

Total Assets $ $11,340$ $ $10,000$

Accounts Payable $ $680$ $ $1,200$

Salaries and Wages Payable $480750$

Notes Payable $($long$-$term$)1,600500$

Common Stock $5,2005,200$

Retained Earnings $3,3802,350$

Total Liabilities and Stockholders$$ Equity $ $11,340$ $ $10,000$

Income Statement

Service Revenue $ $37,900$

Salaries and Wages Expense $35,400$

Depreciation Expense $270$

Income Tax Expense $1,200$

Net Income $ $1,030$

Additional Data:

Bought new hockey equipment for cash, $$520.$

Borrowed $$1,100$ cash from the bank during the year.

Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash.

Required:

$1.$ Prepare the statement of cash flows for the current year ended December $31$ using the indirect method. $($Amounts to be deducted should be indicated with a minus sign.$)3$ PA$12-4($Algo$)$ Preparing and Interpreting a Statement of Cash Flows $($Indirect Merthod$)[$LO $12-2,$ LO $12-3,$

LO $12-4,$ LO $12-5]$

Heads Up Company was started several y$$ars ago by two hockey instructors. The company's comparative balance sheets and income

statement follow, along with additional information.

Batance Sheet at Decenber $31$

Cash

Accounts Receivable

Equipment

Accumulated Depreciation$-$Equipnent

Total Assets

Accounts Payable

Salaries and Hages Payable

Notes Payable $($long$-$term$)$

Comnon Stock

Retained Earnings

Total Liabilities and Stockholders' Equity

Incone Statement

Service Revenue

Satarles and Wages Expense

Depreciation Expense

Incone Tax Expense

Net Income

Current Year Previbus Year

$[37,900],[35,400],[270],[1,200],[$$$1,030]$

Additional Data:

a$.$ Bought new hockey equipment for cash, $$520.$

b$.$ Borrowed $$1,100$ cash from the bank during the year.

c$.$ Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability

accounts relating to income tax, assume that this expense was fully paid in cash.

Requirod:

Prepare the statement of cash flows for the current year ended December $31$ using the indirect method. $($Amounts to be deducted

should be indicated with a minus sign.$)$