Supplement A) Preparing a Statement of Cash Flows (Direct Method)
Use the information concerning Sharp Screen Films, Inc., provided in Problem 12-1 to fulfill the following requirements.
Required:
1. Prepare the statement of cash flows using the direct method for the year ended December 21, 2015.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Sharp Screen Films during 2015.
Refer problem 12-1
Preparing a Statement of Cash Flows (Indirect Method) (AP12-1)
Sharp Screen Films, Inc., is developing its annual financial statements at December 31, 2015. 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, 548,900.
b. Paid S14,700 on the long-term note payable.
c. Issued new shares of stock for S38,050 cash.
d. Dividends of 5650 were declared and paid.
e. Other expenses all relate to wages.
f. 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, 2015.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by Sharp Screen Films during 2015.

2015 2014 Balance sheet at December 31 $ 73,250 63,500 Cash Accounts receivable 21,350 18,000 50 160,350 Less: Accumulated depreciation(57,450 (45,750) $263,750 $217,450 15,250 23,450 Merchandise inventory Property and equipment 209,2 Accounts payable Wages payable Note payable, long-term Contributed capital Retained earnings 16,500 2,000 56,300 103,950 85,000 $263.750 $ 19,000 2,700 71,000 65,900 58,850 $217,450 Income statement for 2015 Sales Cost of goods sold Depreciation expense Other expenses Net income $205,000 123,500 11,700 43,000 $ 26,800