Question
Sharp Screen Films, Inc., is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows.
Sharp Screen Films, Inc., is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows: 2015 2014 Balance sheet at December 31 Cash $ 64,850 $ 63,700 Accounts receivable 15,750 22,850 Merchandise inventory 22,850 18,200 Property and equipment 209,450 150,700 Less: Accumulated depreciation (59,500 ) (45,950 ) $ 253,400 $ 209,500 Accounts payable $ 9,400 $ 19,700 Wages payable 2,500 3,000 Note payable, long-term 60,600 71,400 Contributed capital 99,300 66,100 Retained earnings 81,600 49,300 $ 253,400 $ 209,500 Income statement for 2015 Sales $ 197,000 Cost of goods sold 94,000 Depreciation expense 13,550 Other expenses 43,200 Net income $ 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, 2015. (List cash outflows as negative amounts.)
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