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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:
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 $ 65,650 16,250 23,350 210,550 (60,400) $ 255,400 $ 10,300 3,300 61,600 100,300 79,900 $ 255,400 $ 64,500 23,350 18,600 152,000 (46,250) $ 212,200 $ 20,400 3,600 72,500 66,400 49,300 $ 212,200 Accounts payable Wages payable Note payable, long-term Contributed capital Retained earnings 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, $58,550 b. Paid $10,900 on the long-term note payable. c. Issued new shares of stock for $33,900 cash. d. Dividends of $14,750 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.) $ 45,350 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 45,350 Net cash provided by operating activities Cash flows from investing activities: Cash payments to purchase fixed assets 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 yearStep by Step Solution
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