The management team of Wickersham Brothers Inc. is preparing its annual financial statements. Information for the Statement of Cash Flows is indicated below. Compute the changes and use the information to finalize the Statement of Cash Flows as indicated in the next page. ANALYSIS PAGE Current Year Prior Year CHANGE Balance Sheet Assets Cash $ 50,000 $ 72,000 $22,000 Accounts Receivable 80,000 70,000 ($10,000) Merchandise Inventory 60,000 65,000 $5,000 Property And Equipment 110,000 60,000 ($50,000) Less: Accumulated Depreciation (30,000) (15,000) $15,000 Total Assets $270,000 $252,000 Liabilities: Accounts Payable $ 10,000 $ 12,000 $2,000 Salaries and Wages Payable 2,000 1,000 (2,000) Notes Payable, Long-Term 50,000 60,000 $10,000 Stockholders’ Equity: Common Stock 100,000 80,000 ($20,000) Retained Earnings 108,000 99,000 ($9,000) Total Liabilities and Stockholders’ Equity $270,000 $252,000 Income Statement Sales $200,000 Cost of Goods Sold 110,000 Depreciation Expense 15,000 Other Expenses 50,000 Net Income $ 25,000 Other information from the company’s records includes the following: ? Bought equipment for cash, $50,000. ? Paid $10,000 on long-term note payable. ? Issued new shares of common stock for $20,000 cash. ? Cash dividends of $16,000 were declared and paid to stockholders. ? Accounts Payable arose from inventory purchases on credit. ? Income Tax Expense ($4,000) and Interest Expense ($3,000) were paid in full at the end of both years and are included in Other Expenses. Required: Prepare the statement of cash flows using the indirect method. 16 POINTS Wickersham Brothers, Inc. Statement of Cash Flows For the Year Ended December 31 CASH FLOW FROM OPERATING ACTIVITIES NET INCOME 25,000 Adjustments to Reconcile net income to net cash provided by operations: Add Depreciation $15,000 Subtract AR Increase ($10,000) Changes in current assets and current liabilities: Add Inventory Decrease $5,000 Add Salaries and Wages Payable Increase $2,000 Net cash provided by (used in) operating activities $37,000 Cash Flows from Investing Activities: Equipment Purchased ($50,000) Net Cash Provided by (used) in Investing Activities ($50,000) Cash Flows from Financing Activities: Obtained Long Term Bank $10,000 Net Cash Provided by (used) in Financing Activities $10,000 Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year 72,000 Cash and Cash Equivalents at End of Year