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

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Chapter1: Financial Statements And Business Decisions
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Exercise 12-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3
MONTGOMERY INCORPORATED
Comparative Balance Sheets
At December 31
Assets
Cash
Accounts receivable, net
Current Year
Prior Year
$ 30,400
10,050
90,100
$ 30,550
12,150
70,150
Inventory
Total current assets
130,550
112,850
Equipment
Accumulated depreciation-Equipment
41,500
(15,300)
49,900
(22,500)
Total assets
$157,950
$ 139,050
Liabilities and Equity
Accounts payable
Salaries payable
Total current liabilities
Equity
Common sLock, no par value
Retained earnings
$23,900
500
$ 25,400
600
24,400
26,000
110,000
23,550
100,000
13,050
Total liabilities and equity
S 157,950
S 139,050
HONTGOMERY INCORPORATED
Income 5tatementL
For Current Year Ended December 31
$ 45,575
(18,950)
26,625
5,550
7,200
Sales
Cost of goods sold
Gross profit
Salaries expense
Depreciation expense
Income before taxes
Income tLax expense
3,375
$ 10,500
Net income
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.
1. Use the above information to prepare a staternennt of cash flows for the currerit year using the indirect method. (Amounts to be
deducted should be indicated by a minus sign.)
Transcribed Image Text:Exercise 12-13 (Static) Indirect: Preparing statement of cash flows LO P2, P3 MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Assets Cash Accounts receivable, net Current Year Prior Year $ 30,400 10,050 90,100 $ 30,550 12,150 70,150 Inventory Total current assets 130,550 112,850 Equipment Accumulated depreciation-Equipment 41,500 (15,300) 49,900 (22,500) Total assets $157,950 $ 139,050 Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common sLock, no par value Retained earnings $23,900 500 $ 25,400 600 24,400 26,000 110,000 23,550 100,000 13,050 Total liabilities and equity S 157,950 S 139,050 HONTGOMERY INCORPORATED Income 5tatementL For Current Year Ended December 31 $ 45,575 (18,950) 26,625 5,550 7,200 Sales Cost of goods sold Gross profit Salaries expense Depreciation expense Income before taxes Income tLax expense 3,375 $ 10,500 Net income 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. 1. Use the above information to prepare a staternennt of cash flows for the currerit year using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
MONTGOMERY, INCORPORATED
Statement of Cash Flows (Indirect Method)
For Current Year Ended December 31
Cash flows from operating activities
Net income
10,500
Adjustments to reconcile net income to net cash used in operating activitios:
Income statement items not affect ng cash
Depreciation expense
7,200
Changes in current operating assets and liabil ties
17,700
Cash fiows from investing activities
Cash flows from financing act vities
17,700
Cash balance at beginning of year
Cash balance at end of year
17.700
%24
%24
%24
%24
%24
Transcribed Image Text:MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Net income 10,500 Adjustments to reconcile net income to net cash used in operating activitios: Income statement items not affect ng cash Depreciation expense 7,200 Changes in current operating assets and liabil ties 17,700 Cash fiows from investing activities Cash flows from financing act vities 17,700 Cash balance at beginning of year Cash balance at end of year 17.700 %24 %24 %24 %24 %24
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