Sharp Screen Films, Inc., is developing its annual financial statements at Decem

Question

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:

Accounts payable includes only inventory purchases made on credit.

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:

Explanation / Answer

SHARP SCREEN FILMS, INC.

Statement of cash flows for the year ended december 31, 2015

Particulars Amount($) Amount($)

Cash flows from operating activities:

Net income 44550

Adjustments to reconcile net income to net cash provided by

operating activities:

depreciation 14450

increase in inventory (5350)

decrease in accounts receivable 6500

decrease in wages payable (500)

decrease in accounts payable (10200) 4900

net cash provided by operating activities 49450

Cash flow from investing activities:

cash payments to purchase fixed assets (58450)

net cash provided by investing activities (9000)

Cash flow from financing activities:

Cash receipts from issuing stock 34900

cash payments for dividends (12050)

cash payments on long term notes (12000)

net increase in cash during the year 1850

cash balance , january 1,2015 65400

cash balance , december 31,2015 67250.

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