Question

Sharp Screen Films, Inc., is developing its annual financial statements at December 31, the 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
Cash 70,550 65,900
Balance sheet at December 31 19,150 25,750
Accounts receivable 25,750 20,300
Property and equipment 213,450 152,600
Less: Accumulated depreciation (62,700) (47,750)
$266,200 $216,800
Accounts payable $13,100 $ 23,200
Wages payable 7,200 3,900
Note payable, long-term 63,300 76,000
Contributed capital 103,900 67,500
Retained earnings 78,700 46,200
$266,200 $216,800
Income statement for current year
Sales $211,000
Cost of goods sold 108,000
Depreciation expense 14,950
Other expenses 44,600
Net income $43,450

Additional Data:
a. Bought equipment for cash, $60,850.
b. Paid $12,700 on the long-term note payable.
c. Issued new shares of stock for $36,400 cash.
d. Dividends of $10,950 were declared and paid.
e. Other expenses all relate to wages.
f. Accounts payable includes only inventory purchases made on credit.

Required:
Prepare the statement of cash flows using the direct method for the year ended December 31, current year.

Answer 1

Answer:

Detailed step-wise solution in tabular form is given below: