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BGP Electrical Supply 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: Balance sheet at December 31 Current Year Prior Year Cash $ 39,100 $ 31,300 Accounts receivable 35,400 31,400 Merchandise inventory 45,000 40, 100 Property and equipment 125, 100 102,800 Less: Accumulated depreciation (33,500) (26,900) $211,100 $177,900 Accounts payable $ 39, 700 $ 30,900 Accrued wages expense 3,200 3,700 Note payable, long-term 46,800 51,800 Common stock and additional paid-in capital 93,700 74,500 Retained earnings 27,700 17,000 $211, 100 $177,900 Income statenent for current year Sales $135,000 Cost of goods sold 85,000 Other expenses 39,300 Net income $ 10, 700 Additional Data: a. Bought equipment for cash, $23,100. b. Paid $5,000 on the long-term note payable. c. Issued new shares of stock for $19,200 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $6,600; wages, $20,900; taxes, $6,400; other, $5,400. 1. 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. BGP ELECTRICAL SUPPLY $ 10,700 Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $ Increase in accounts receivable Increase in merchandise inventory Increase in accounts payable Decrease in accrued wages expense 6,600 4,000 4,900 8,800 (500) 23,800 34,500 Cash flows from investing activities: Cash payments to purchase property and equipment (23,100) (23,100) Cash flows from financing activities: Cash payments on long-term note (5,000) (5,000) Net increase in cash during the year $ 0

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