Chapter 12 - Chapter 12 Sharp Screen Films Inc is...

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Chapter 12 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, $60,050. b. Paid $13,000 on the long-term note payable. c. Issued new shares of stock for $35,300 cash. d. Dividends of $10,350 were declared and paid. e. Other expenses all relate to wages. f. Accounts payable includes only inventory purchases made on credit. Prepare the statement of cash flows using the indirect method for the year ended December 31, 2015 SHARP SCREEN FILMS, INC. Statement of Cash Flows For the Year Ended December 31, 2015 Cash flows from operating activities: Net income $43,950 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $14,750 Decrease in accounts receivable 6,700 Increase in merchandise inventory (5,550) Decrease in accounts payable (10,200) Decrease in wages payable (600) 5,100 Net cash provided by operating activities 49,050 Cash flows from investing activities: Cash payments to purchase fixed assets (60,050) Net cash used in investing activities (60,050) Cash flows from financing activities: Cash payments on long-term note (13,000) Cash payments for dividends (10,350) Cash receipts from issuing stock 35,300 Net cash provided by financing activities 11,950 Net increase in cash during the year 950 Cash balance, January 1, 2015 66,000 Cash balance, December 31, 2015 $66,950
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Stanley Furniture Company is a Virginia-based furniture manufacturer. For each of the following first-year transactions, indicate whether net cash inflows (outflows) from operating activities (NCFO), investing activities (NCFI), or financing activities (NCFF) are affected and whether the effect is an inflow (+) or outflow (–). ( Hint: Determine the journal entry recorded for the transaction. The transaction affects net cash flows if and only if the account Cash is affected.) 1.Recorded an adjusting entry to record accrued salaries expense. NE 2.Paid cash to purchase new equipment. NCFI 3.Collected payments on account from customers. + NCFO 4.Recorded and paid interest on debt to creditors. NCFO 5.Declared and paid cash dividends to shareholders. NCFF 6.Sold used equipment for cash at book value. + NCFI 7.Prepaid rent for the following period. NCFO 8.Repaid principal on revolving credit loan from bank. NCFF 9.Purchased raw materials inventory on account.
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