Item$3$

Sharp Screen Films, Incorporated, 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

$ $73,250$

$ $63,500$

Accounts receivable

$15,250$

$21,350$

Merchandise inventory

$23,450$

$18,000$

Property and equipment

$209,250$

$160,350$

Less: Accumulated depreciation

$(57,450)$

$(45,750)$

$$

$ $263,750$

$ $217,450$

Accounts payable

$ $16,500$

$ $19,000$

Wages payable

$2,000$

$2,700$

Note payable, long$-$term

$56,300$

$71,000$

Common stock and additional paid$-$in capital

$103,950$

$65,900$

Retained earnings

$85,000$

$58,850$

$$

$ $263,750$

$ $217,450$

Income statement for current year

$$

$$

Sales

$ $205,000$

$$

Cost of goods sold

$123,500$

$$

Depreciation expense

$11,700$

$$

Other expenses

$43,000$

$$

Net income

$ $26,800$

$$

Additional Data:

Bought equipment for cash, $$48,900.$

Paid $$14,700$ on the long$-$term note payable.

Issued new shares of stock for $$38,050$ cash.

Dividends of $$650$ 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.

Note: List cash outflows as negative amounts.

SHARP SCREEN FILMS, INCORPORATEDStatement of Cash FlowsFor the Year Ended December $31,$ Current YearCash flows from operating activities:Adjustments to reconcile net income to net cash provided by operating activities:$00$Cash flows from investing activities:$0$Cash flows from financing activities:$0$$$0$