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 $ 64,850 15,750 22,850 209, 450 (59,500) $ 253,400 $ 9,400 2,500 60,600 99, 300 81,600 $ 253,400 $ 63,700 22,850 18,200 150,700 (45,950) $ 209,500 $ 19,700 3,000 71,400 66,100 49,300 $ 209,500 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 $ 197,000 94,000 13,550 43,200 $ 46,250 Additional Data: a. Bought equipment for cash, $58,750. b. Paid $10,800 on the long-term note payable. c. Issued new shares of stock for $33,200 cash. d. Dividends of $13,950 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. (List cash outflows as negative amounts.) $ 46,250 SHARP SCREEN FILMS, INC. 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 Decrease in wages payable 13,550 13,550 59,800 Net cash provided by operating activities Cash flows from investing activities: Cash payments to purchase property and equipment Net cash used in investing activities Cash flows from financing activities: Cash payments on long-term note Cash payments for dividends Cash receipts from issuing stock 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