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 $ 73,250 $63,500 Accounts receivable 15,250 21,350 Merchandise inventory 23,450 18,000 Property and equipment 209,250 160,350 Less: Accumulated depreciation (57,450) (45,750) $263,750 $217,450 Accounts payable $ 16,500 $ 19,000 Wages payable 2,000 2,700 Note payable, long-term 56,300 71,000 Common stock and additional paid-in capital 103,950 65,900 Retained earnings 85,000 58,850 $263,750 $217,450 Income statement for current year Sales $205,000 Cost of goods sold 123,500 Depreciation expense 11,700 Other expenses 43,000 Net income $ 26,800 Additional Data: a. Bought equipment for cash, $48,900. b. Paid $14,700 on the long-term note payable. c. Issued new shares of stock for $38,050 cash. d. Dividends of $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. 2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Sharp Screen Films during the current year.