Soft Touch Company was started several years ago by two golf instructors. The company's comparative balance sheets and income statement are presented below, along with additional information. Current Year Previous Year Balance Sheet at December 31 Cash Accounts Receivable $ 8,250 3,600 11,000 (2,600) $20,250 $ 2,100 1,550 1,000 11,000 4,600 $20,250 $13,740 2,400 12,100 (3,110) $25,130 $ 1,100 1,040 3,100 11,000 8,890 $25,130 Equipment Accumulated Depreciation-Equipment Total Assets Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings Total Liabilities and Stockholders' Equity Income Statement Service Revenue Salaries and Wages Expense Depreciation Expense Income Tax Expense $75,400 68,500 510 2,100 $ 4,290 Net Income Additional Data: a. Bought new golf clubs using cash, $1,100. b. Borrowed $2,100 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 Income Tax 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.) SOFT TOUCH COMPANY Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense Decrease in Accounts Receivable Decrease in Accounts Payable Decrease in Salaries and Wages Payable Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Cash Payments to Purchase Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities: Cash Proceeds from Bank Loan Net Cash Provided by Financing Activities Net Increase in Cash during the Year Cash Balance, January 1 Cash Balance, December 31