Exercise 12-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3MONTGOMERY INCORPORATEDComparative Balance SheetsAt December 31AssetsCashAccounts receivable, netCurrent YearPrior Year$ 30,40010,05090,100$ 30,55012,15070,150InventoryTotal current assets130,550112,850EquipmentAccumulated depreciation-Equipment41,500(15,300)49,900(22,500)Total assets$157,950$ 139,050Liabilities and EquityAccounts payableSalaries payableTotal current liabilitiesEquityCommon sLock, no par valueRetained earnings$23,900500$ 25,40060024,40026,000110,00023,550100,00013,050Total liabilities and equityS 157,950S 139,050HONTGOMERY INCORPORATEDIncome 5tatementLFor Current Year Ended December 31$ 45,575(18,950)26,6255,5507,200SalesCost of goods soldGross profitSalaries expenseDepreciation expenseIncome before taxesIncome tLax expense3,375$ 10,500Net incomeAdditional Information on Current-Year Transactionsa. No dividends are declared or paid.b. Issued additional stock for $10,000 cash.c. Purchased equipment for cash; no equipment was sold.1. Use the above information to prepare a staternennt of cash flows for the currerit year using the indirect method. (Amounts to bededucted should be indicated by a minus sign.) MONTGOMERY, INCORPORATEDStatement of Cash Flows (Indirect Method)For Current Year Ended December 31Cash flows from operating activitiesNet income10,500Adjustments to reconcile net income to net cash used in operating activitios:Income statement items not affect ng cashDepreciation expense7,200Changes in current operating assets and liabil ties17,700Cash fiows from investing activitiesCash flows from financing act vities17,700Cash balance at beginning of yearCash balance at end of year17.700%24%24%24%24%24

Name: Exercise 12-13 (Static) Indirect: Preparing statement of cash flows L
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Description: Exercise 12-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3MONTGOMERY INCORPORATEDComparative Balance SheetsAt December 31AssetsCashAccounts receivable, netCurrent YearPrior Year$ 30,40010,05090,100$ 30,55012,15070,150InventoryTota

Statement of cash flows forms a part of financial statements of the entity and is prepared with a…

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2-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3 MONTGOMERY INCORPORATED Comparative Balance Sheets er 31 Current Year Prior Year $ 30,400 $ 30,550 receivable, net 10,050 90,100 130,550 49,900 12,150 70,150 crent assets 112,850 41,500 ced depreciation-Equipment

2-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3 MONTGOMERY INCORPORATED Comparative Balance Sheets er 31 Current Year Prior Year $ 30,400 $ 30,550 receivable, net 10,050 90,100 130,550 49,900 12,150 70,150 crent assets 112,850 41,500 ced depreciation-Equipment

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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