Exercise 23-14

Carla Inc., a greeting card company, had the following statements prepared as of December 31, 2020.

CARLA INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019
		12/31/20			12/31/19
Cash		$6,000			$7,100
Accounts receivable		62,600			51,100
Short-term debt investments (available-for-sale)		35,400			18,100
Inventory		39,700			59,600
Prepaid rent		5,000			4,000
Equipment		154,200			128,700
Accumulated depreciationequipment		(35,300	)		(24,800	)
Copyrights		45,500			49,800
Total assets		$313,100			$293,600
Accounts payable		$45,500			$39,800
Income taxes payable		4,000			6,000
Salaries and wages payable		7,900			3,900
Short-term loans payable		8,000			9,900
Long-term loans payable		60,600			69,500
Common stock, $10 par		100,000			100,000
Contributed capital, common stock		30,000			30,000
Retained earnings		57,100			34,500
Total liabilities & stockholders equity		$313,100			$293,600

CARLA INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020
Sales revenue				$340,975
Cost of goods sold				176,300
Gross profit				164,675
Operating expenses				119,600
Operating income				45,075
Interest expense		$11,300
Gain on sale of equipment		2,100		9,200
Income before tax				35,875
Income tax expense				7,175
Net income				$28,700

Additional information:

1.		Dividends in the amount of $6,100 were declared and paid during 2020.
2.		Depreciation expense and amortization expense are included in operating expenses.
3.		No unrealized gains or losses have occurred on the investments during the year.
4.		Equipment that had a cost of $20,100 and was 70% depreciated was sold during 2020.

Prepare a statement of cash flows using the indirect method.