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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 flows. The completed comparative balance sheets and income statement are summarized as follows:

Additional Data:

1. Bought equipment for cash, $60,550.
2. Paid $15,390 on the long-term note payable.
3. Issued new shares of stock for $35,000 cash.
4. Dividends of $760 were declared and paid.
5. Other expenses all relate to wages.
6. 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.)

Current Year Prior Year Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation $ 69,950 18,150 24,750 212,250 (61,500) $263,600 $ 11,800 2,800 59,010 102,000 $ 65,500 24,750 19,200 151,700 (47,050) $ 214,100 $ 21,900 6,500 74,400 Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings 67,000 87,990 $263,600 44,300 $214,100 Income statement for current year Sales Cost of goods sold Depreciation expense Other expenses Net income $206,000 103,000 14,450 44,100 $ 44, 450 SHARP SCREEN FILMS, INC. Statement of Cash Flows For the Year Ended December 31, Current Year Cash flows from operating activities: Collections from customers $ 44,450 Payments for wages 14,450 X 6,600 Payments to suppliers (5,500) X 60,000 Net cash provided by operating activities Cash flows from investing activities: Cash payments to purchase property and equipment (60,550) (60,550) Net cash used in investing activities Cash flows from financing activities: Cash payments on long-term note Cash receipts from issuing stock Cash payments for dividends (15,390) 35,000 (760) 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 18,850 4,450 65,500 69,950 $

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