PA12-3 Preparing a Statement of Cash Flows (Indirect Method) [LO 12-2, LO 12-3, LO 12-4, LO 12-5]

XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

	Current Year					Previous Year
Balance Sheet at December 31
Cash		$	33,440				$	28,400
Accounts Receivable			34,200					27,600
Inventory			40,200					37,600
Equipment			115,000					96,000
Accumulated DepreciationEquipment			(29,200	)				(24,600	)
		$	193,640				$	165,000
Accounts Payable		$	35,200				$	26,600
Salaries and Wages Payable			1,440					1,600
Note Payable (long-term)			34,400					40,000
Common Stock			86,200					72,200
Retained Earnings			36,400					24,600
		$	193,640				$	165,000
Income Statement
Sales Revenue		$	116,000
Cost of Goods Sold			68,000
Other Expenses			36,200
Net Income		$	11,800

Additional Data:
a.	Bought equipment for cash, $19,000.
b.	Paid $5,600 on the long-term note payable.
c.	Issued new shares of stock for $14,000 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $4,600; Salaries and wages, $19,600; taxes, $5,600; utilities, $6,400.
f.	Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were 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.)

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.) XS SUPPLY COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Flows from Financing Activities