Prior Year MONGOMERY INC. Comparative Balance Sheets December 31 Current Year Assets Cash $ 56,900 Accounts receivable, net 14,100 Inventory 126,400 Total current assets 197,400 Equipment 70,000 Accum. depreciation-Equipment (31,700) Total assets $235,700 Liabilities and Equity Accounts payable $ 33,700 Salaries payable 600 Total current liabilities 34,300 Equity Common stock, no par value 170,000 Retained earnings 31,400 Total liabilities and equity $235,700 $ 57,100 17,300 100,000 174,400 59,200 (21,800) $211,800 39 $ 36,200 800 37,000 157,400 17,400 $211,800 MONTGOMERY INC. Income Statement For Current Year Ended December 31 Sales $ 61,500 Cost of goods sold (25,500) Gross profit 36,000 Operating expenses Depreciation expense $ 9,900 Other expenses 7,600 Total operating expense 17,500 Income before taxes 18,500 Income tax expense 4,500 Net income $ 14,000 Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $12,600 cash. C. 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 deducted should be indicated by a minus sign.) MONTGOMERY, INC. 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 provided by operations: Income statement items not affecting cash Changes in current operating assets and liabilities $ 0 Cash flows from investing activities 0 Cash flows from financing activities $ $ 0 0 Net cash used in financing activities Not increase in cash Cash balance at beginning of your Cash balance at end of year $