BG Wholesalers is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

BG Wholesalers is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:
 

	Current Year				Prior Year
Balance sheet at December 31
Cash	$	38,100			$	30,600
Accounts receivable		34,200				29,700
Merchandise inventory		42,000				38,900
Property and equipment		123,100				101,300
Less: Accumulated depreciation		(31,900	)			(26,000	)
	$	205,500			$	174,500
Accounts payable	$	38,000			$	29,200
Accrued wages expense		2,100				2,700
Note payable, long-term		45,800				52,100
Contributed capital		91,300				73,600
Retained earnings		28,300				16,900
	$	205,500			$	174,500
Income statement for current year
Sales	$	128,000
Cost of goods sold		78,000
Other expenses		38,600
Net income	$	11,400

Additional Data:

1. Bought equipment for cash, $21,800.
2. Paid $6,300 on the long-term note payable.
3. Issued new shares of stock for $17,700 cash.
4. No dividends were declared or paid.
5. Other expenses included depreciation, $5,900; wages, $20,900; taxes, $6,300; other, $5,500.
6. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. (List cash outflows as negative amounts.)

Here

Explanation:

1.

Related Cash Flow Section	Balance Sheet at December 31	Current Year				Prior Year			Change
Δ in Cash	Cash	$	38,100			$	30,600		+	7,500		Net increase in cash
O	Accounts receivable		34,200				29,700		+	4,500		Subtract from net income the increase in A/R
O	Merchandise inventory		42,000				38,900		+	3,100		Subtract from net income the increase in Inventory
I	Property and equipment		123,100				101,300		+	21,800		Payment in cash for equipment
O	Less: Accumulated depreciation		(31,900	)			(26,000	)	−	5,900		Add back to NI because depreciation expense does not affect cash
		$	205,500			$	174,500
O	Accounts payable	$	38,000			$	29,200		+	8,800		Add to net income the increase in Accounts Payable
O	Accrued wage expense		2,100				2,700		−	600		Subtract from net income the decrease in accrued wage expense
F	Note payable, long-term		45,800				52,100		−	6,300		Cash used for repayment of note principal
F	Contributed capital		91,300				73,600		+	17,700		Issuance of stock for cash
O,F	Retained earnings		28,300				16,900		+	11,400		Increased for net income amount
		$	205,500			$	174,500

    
Income statement for current year:
 

Sales	$	128,000
Cost of goods sold		78,000
Other expenses		38,600
Net income	$	11,400