P12-1 (Algo) Preparing a Statement of Cash Flows (Indirect Method) LO12-1, 12-2, 12-4, 12-6 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: 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 Current Year Prior Year $ 67,250 20,050 26,050 214,350 (63,700) $ 264,000 $ 13,700 5,500 64,200 104,500 76,100 $ 264,000 $ 214,000 111,000 15,650 44,900 $ 66,400 26,050 21,000 153,300 (48,050) $ 218,700 $ 24,100 6,100 76,300 67,900 44,300 $ 218,700 $ 42,450 Additional Data: a. Bought equipment for cash, $61,050. b. Paid $12,100 on the long-term note payable. c. Issued new shares of stock for $36,600 cash. d. Dividends of $10,650 were declared and paid. e. Other expenses all relate to wages. f. Accounts payable includes only inventory purchases made on credit. Required: 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: Adjustments to reconcile net income to net cash provided by operating activities: Cash flows from investing activities: 0 0