Question: HiDef Films Inc is developing its annual financial statement

HiDef Films , Inc., is developing its annual financial statements at December 31, 2012. 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:
a. Bought equipment for cash, $59,250.
b. Paid $11,500 on the long-term note payable.
c. Issued new shares of stock for $32,600 cash.
d. Dividends of $12,650 were declared and paid.
e. Other expenses all relate to wages.
f. Accounts payable includes only inventory purchases made on credit.
1. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2012.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by HiDef Films during2012.
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