Newark Company is preparing its annual financial statements at December 31, current year. The statements are complete except for
the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Prior Year Balance sheet at December 31 Cash $ 38,100 $ 30,600 Accounts receivable 34,200 29,700 Merchandise inventory 42,000 38,900 Property and equipment 123,100 101,300 Less: Accumulated depreciation (31,900 ) (26,000 ) $ 205,500 $ 174,500 Accounts payable $ 38,000 $ 29,200 Accrued wages expense 2,100 2,700 Note payable, long-term 45,800 52,100 Common stock and additional paid-in capital 91,300 73,600 Retained earnings 28,300 16,900 $ 205,500 $ 174,500 Income statement for current year Sales $ 128,000 Cost of goods sold 78,000 Other expenses 38,600 Net income $ 11,400 Additional Information: Other expenses included depreciation, $5,900; wages, $20,900; taxes, $6,300; other, $5,500. Bought equipment for cash, $21,800. Paid $6,300 on the long-term note payable. Issued new shares of stock for $17,700 cash. No dividends were declared or paid. 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 year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)
