Problem
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 $ 66,950 $ 65,900 Accounts receivable 18,250 25,050 Merchandise inventory 25,050 19,400 Property and equipment 212,450 152,700 Less: Accumulated depreciation (61,700 ) (47,150 ) $ 261,000 $ 215,900 Accounts payable $ 12,100 $ 22,200 Wages payable 4,600 5,100 Note payable, long-term 62,400 75,000 Contributed capital 102,100 67,100 Retained earnings 79,800 46,500 $ 261,000 $ 215,900 Income statement for current year Sales $ 207,000 Cost of goods sold 104,000 Depreciation expense 14,550 Other expenses 44,200 Net income $ 44,250 Additional Data: Bought equipment for cash, $59,750. Paid $12,600 on the long-term note payable. Issued new shares of stock for $35,000 cash. Dividends of $10,950 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 indirect method for the year ended December 31, current year.