P12-3 (Algo) (Supplement A) Preparing a Statement of Cash Flows (Direct Method) Sharp Screen Films, Inc., 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: Current Year Prior Year 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 $ 68,850 16,250 23,350 210,550 (60,400) $258,600 $ 10,300 1,800 54,550 100,300 91,650 $258,600 $ 64,500 23,350 18,600 151,400 (46,250) $211,600 $ 20,400 5,300 72,500 66,400 47,000 $211,600 Income statement for current year Sales Cost of goods sold Depreciation expense Other expenses Net income $200,000 97,000 14,150 43,500 $ 45, 350 Additional Data: a. Bought equipment for cash, $59,150. b. Paid $17,950 on the long-term note payable. C. Issued new shares of stock for $33,900 cash. d. Dividends of $700 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 direct method for the year ended December 31, current year. (List cash outflows as negative amounts.) SHARP SCREEN FILMS, INC. Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: 0 Cash flows from investing activities: 0 Cash flows from financing activities: 0 $ 0