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		$	34,720				$	29,750
Accounts Receivable			35,600					28,300
Inventory			41,600					38,300
Equipment			125,500					103,000
Accumulated DepreciationEquipment			(30,600	)				(25,300	)
		$	206,820				$	174,050
Accounts Payable		$	36,600				$	27,300
Salaries and Wages Payable			1,320					1,550
Note Payable (long-term)			40,700					47,000
Common Stock			90,400					72,900
Retained Earnings			37,800					25,300
		$	206,820				$	174,050
Income Statement
Sales Revenue		$	123,000
Cost of Goods Sold			71,500
Other Expenses			39,000
Net Income		$	12,500

Additional Data:
a.	Bought equipment for cash, $22,500.
b.	Paid $6,300 on the long-term note payable.
c.	Issued new shares of stock for $17,500 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $5,300; Salaries and wages, $20,300; taxes, $6,300; utilities, $7,100.
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.)

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