Question
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.
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