5 Sharp Screen Films, Incorporated, 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 as follows: 2 points eBook Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Cost of goods sold Depreciation expense Other expenses Net income Additional Date: a. Bought equipment for cash, $61,350. b. Paid $12,900 on the long-term note payable. c. Issued new shares of stock for $35,900 cash. d. Dividends of $10,150 were declared and paid. e. Other expenses all relate to wages. Current Year Prior Year $ 66,750 $ 65,800 18,650 25,650 25,650 213,350 (62,500) $ 261,900 $ 12,700 5,000 63,000 103,300 77,900 $ 261,900 $210,000 107,000 14,850 44,500 $ 43,650 f. Accounts payable includes only inventory purchases made on credit. Required: 20,100 152,000 (47,650) $ 215,900 $ 22,900 5,300 75,900 67,480 44,400 $ 215,900 1. Prepare the statement of cash flows using the indirect method for the year ended December 31, current year. Note: List cash outflows as negative amounts. SHARP SCREEN FILMS, INCORPORATED 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 Decrease in accounts receivable Increase in merchandise inventory Decrease in accounts payable S 14,850 7,000 (5,550) Decrease in wages payable Decrease in wages payable Net cash provided by operating activities Cash flows from investing activities: Cash payments to purchase property and equipment (61,350) Net cash used in investing activities Cash flows from financing activities: Cash payments on long-term note 12,900 Cash payments for dividends Cash receipts from issuing stock (10,150) 35,900 Net cash provided by financing activities Net increase in cash during the year Cash balance, January 1, current year Cash balance, December 31, current year 's 43,650 16,300 59,950 (61,350) 38,650 S 0