Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Trainer Online Purchase Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Philip E. Fess

8th Edition

0324204604, 978-0324204605

More Books

Students also viewed these Accounting questions