Use the following information to prepa owing information to prepare a statement of cash flows for the current year using the ind
irect method, Exercise 12-12 Indirect: Preparing statement of cash flows P2 P3 MONTGOMERY INC. Comparative Balance Sheets Current Year Prior Year MONTGOMERY INC. Income Statement For Current Year Ended December 31 $45,575 (18,950) 26,625 At December 31 Assets Cash. Accounts receivable, net .. Inventory Total current assets Equipment Accum. depreciation-Equipment... Total assets.. Liabilities and Equity Accounts payable........ Salaries payable Total current liabilities $ 30,400 10.050 90.100 130.550 49,900 (22,500) $157,950 $ 30,550 12,150 70,150 112,850 41,500 (15.300) $139,050 Sales ....... Cost of goods sold Gross profit Operating expenses Depreciation expense.... Other expenses ......... Total operating expenses ... Income before taxes. Income tax expense.... Net income.... $7,200 5,550 12.750 13,875 3,375 $10,500 $ 23,900 500 24,400 $ 25,400 600 26,000 Equity Common stock, no par value....... Retained earnings. Total liabilities and equity.......... 110,000 23,550 $157,950 100,000 13.050 $139,050 Additional Information on Current-Year Transactions
a. No dividends are declared or paid.
b. Issued additional stock for $10,000 cash.
c. Purchased equipment for cash; no equipment was sold.
