Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
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
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 | $ | 71,150 | $ | 66,400 | |||
Accounts receivable | 20,050 | 26,050 | |||||
Merchandise inventory | 26,050 | 21,000 | |||||
Property and equipment | 214,350 | 153,800 | |||||
Less: Accumulated depreciation | (63,700 | ) | (48,050 | ) | |||
$ | 267,900 | $ | 219,200 | ||||
Accounts payable | $ | 13,700 | $ | 24,100 | |||
Wages payable | 4,700 | 7,500 | |||||
Note payable, long-term | 59,990 | 76,300 | |||||
Common stock and additional paid-in capital | 104,500 | 67,900 | |||||
Retained earnings | 85,010 | 43,400 | |||||
$ | 267,900 | $ | 219,200 | ||||
Income statement for current year | |||||||
Sales | $ | 214,000 | |||||
Cost of goods sold | 111,000 | ||||||
Depreciation expense | 15,650 | ||||||
Other expenses | 44,900 | ||||||
Net income | $ | 42,450 | |||||
Additional Data:
- Bought equipment for cash, $60,550.
- Paid $16,310 on the long-term note payable.
- Issued new shares of stock for $36,600 cash.
- Dividends of $840 were declared and paid.
- Other expenses all relate to wages.
- 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.)
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started