a Presented below is the comparative balance sheet for Carla Vista Inc, a private company reporting under ASPE, at December 31, 2021, and 2020 CARLA VISTA INC. Balance Sheet December 31 Assets 2021 2020 Cash $63,500 $98,000 101.000 75,000 205,000 155,500 Accounts receivable Inventory Long-term investment Property, plant, and equipment Less. Accumulated depreciation 101.500 0 535.000 460,000 (162,500) (140,000) $843,500 $648,500 $57,500 $47,000 6,000 0 Liabilities and Shareholders' Equity Accounts payable Dividends payable Income tax payable Long-term notes payable Common shares Retained earnings 14,000 15,000 25,000 0 630,000 525,000 111,000 61,500 $843,500 $648,500 CARLA VISTA INC. Income Statement Year Ended December 31, 2021 CARLA VISTA INC. Income Statement Year Ended December 31, 2021 Sales $659,500 432,000 227,500 Cost of goods sold Gross profit Operating expenses Loss on sale of equipment Profit from operations $147.500 3,000 150,500 77.000 Interest expense 3,000 (4,500 (1,500) Interest revenue Profit before income tax 78,500 14,000 Income tax expense Profit $64,500 Additional information: 1 2 3. 4. Cash dividends of $15,000 were declared. A long-term investment was acquired for cash at a cost of $101,500, Depreciation expense is included in the operating expenses. The company issued 10,500 common shares for cash on March 2, 2021. The fair value of the shares was $10 per share. The proceeds were used to purchase additional equipment Equipment that originally cost $30,000 was sold during the year for cash. The equipment had a carrying value of $9.000 at the time of sale. The company issued a note payable for $28.000 and repaid $3,000 by year end. All purchases of inventory are on credit Accounts Payable is used only to record purchases of inventory 5. 6. 7. 8 Prepare a cash flow statement for the year using the direct method. (Show amounts that decrease cash flow with either a - signes. - 15,000 or in parenthesises. (15,000) CARLA VISTA INC. Cash Flow Statement - Direct Method Year Ended December 31, 2021 Net Cath Used by Operating Activities Operating Activities $ >