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At December 31 Assets Cash MONTGOMERY INCORPORATED Comparative Balance Sheets Current Year Accounts receivable, net Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales $ 78,000 Cost of goods sold Gross profit (32,300) 45,700 Salaries expense Depreciation expense Income before taxes Income tax expense Net income Cash flows from operating activities 9,700 12,900 23,100 5,700 $ 17,400 Cash flows from investing activities Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $16,500 cash. c. Purchased equipment for cash; no equipment was sold. Cash flows from financing activities $ 64,000 18,700 167,600 Changes in current operating assets and liabilities Cash balance at beginning of year Cash balance at and of year 250,300 92,800 (42,000) $ 301,100 $ 44,700 800 45,500 216,400 39,200 $ 301,100 1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. Note: Amounts to be deducted should be indicated by a minus sign. Prior Year $ 64,600 O 23,100 133,500 221,200 79,000 (29,100) $ 271,100 $48,400 1,000 49,400 Adjustments to reconcile net income to net cash used in operating activities: Income statement items not affecting cash 199,900 21,800 $ 271,100 MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 $ $ $ S 0 0 0 0 0

At December 31 Assets Cash MONTGOMERY INCORPORATED Comparative Balance Sheets Current Year Accounts receivable, net Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales $ 78,000 Cost of goods sold Gross profit (32,300) 45,700 Salaries expense Depreciation expense Income before taxes Income tax expense Net income Cash flows from operating activities 9,700 12,900 23,100 5,700 $ 17,400 Cash flows from investing activities Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Issued additional stock for $16,500 cash. c. Purchased equipment for cash; no equipment was sold. Cash flows from financing activities $ 64,000 18,700 167,600 Changes in current operating assets and liabilities Cash balance at beginning of year Cash balance at and of year 250,300 92,800 (42,000) $ 301,100 $ 44,700 800 45,500 216,400 39,200 $ 301,100 1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. Note: Amounts to be deducted should be indicated by a minus sign. Prior Year $ 64,600 O 23,100 133,500 221,200 79,000 (29,100) $ 271,100 $48,400 1,000 49,400 Adjustments to reconcile net income to net cash used in operating activities: Income statement items not affecting cash 199,900 21,800 $ 271,100 MONTGOMERY, INCORPORATED Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 $ $ $ S 0 0 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Montgomery Incorporated Financial Statements #### Comparative Balance Sheets As of December 31 **Assets** - **Cash** - Current Year: $64,000 - Prior Year: $64,600 - **Accounts Receivable, Net** - Current Year: $18,700 - Prior Year: $23,100 - **Inventory** - Current Year: $167,600 - Prior Year: $133,500 - **Total Current Assets** - Current Year: $250,300 - Prior Year: $221,200 - **Equipment** - Current Year: $92,800 - Prior Year: $79,000 - **Accumulated Depreciation-Equipment** - Current Year: $(42,000) - Prior Year: $(29,100) **Total Assets** - Current Year: $301,100 - Prior Year: $271,100 **Liabilities and Equity** - **Accounts Payable** - Current Year: $44,700 - Prior Year: $48,400 - **Salaries Payable** - Current Year: $800 - Prior Year: $1,600 - **Total Current Liabilities** - Current Year: $45,500 - Prior Year: $49,400 **Equity** - **Common Stock, No Par Value** - Current Year: $216,400 - Prior Year: $199,900 - **Retained Earnings** - Current Year: $39,200 - Prior Year: $21,800 **Total Liabilities and Equity** - Current Year: $301,100 - Prior Year: $271,100 #### Income Statement For Current Year Ended December 31 - **Sales:** $78,000 - **Cost of Goods Sold:** $(32,300) - **Gross Profit:** $45,700 - **Salaries Expense:** $9,700 - **Depreciation Expense:** $12,900 - **Income Before Taxes:** $23,100 - **Income Tax Expense:** $5,700 - **Net Income:** $17,400 #### Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Additional stock was issued for $16,500 cash. c
Transcribed Image Text:### Montgomery Incorporated Financial Statements #### Comparative Balance Sheets As of December 31 **Assets** - **Cash** - Current Year: $64,000 - Prior Year: $64,600 - **Accounts Receivable, Net** - Current Year: $18,700 - Prior Year: $23,100 - **Inventory** - Current Year: $167,600 - Prior Year: $133,500 - **Total Current Assets** - Current Year: $250,300 - Prior Year: $221,200 - **Equipment** - Current Year: $92,800 - Prior Year: $79,000 - **Accumulated Depreciation-Equipment** - Current Year: $(42,000) - Prior Year: $(29,100) **Total Assets** - Current Year: $301,100 - Prior Year: $271,100 **Liabilities and Equity** - **Accounts Payable** - Current Year: $44,700 - Prior Year: $48,400 - **Salaries Payable** - Current Year: $800 - Prior Year: $1,600 - **Total Current Liabilities** - Current Year: $45,500 - Prior Year: $49,400 **Equity** - **Common Stock, No Par Value** - Current Year: $216,400 - Prior Year: $199,900 - **Retained Earnings** - Current Year: $39,200 - Prior Year: $21,800 **Total Liabilities and Equity** - Current Year: $301,100 - Prior Year: $271,100 #### Income Statement For Current Year Ended December 31 - **Sales:** $78,000 - **Cost of Goods Sold:** $(32,300) - **Gross Profit:** $45,700 - **Salaries Expense:** $9,700 - **Depreciation Expense:** $12,900 - **Income Before Taxes:** $23,100 - **Income Tax Expense:** $5,700 - **Net Income:** $17,400 #### Additional Information on Current-Year Transactions a. No dividends are declared or paid. b. Additional stock was issued for $16,500 cash. c
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