Question
The following comparative balance sheet and other information relate to Carlson Company. (10 points) Carlson Company Comparative Balance Sheets December 31, 20x5 and 20x4 Assets
The following comparative balance sheet and other information relate to Carlson Company.
(10 points)
Carlson Company | ||
Comparative Balance Sheets December 31, 20x5 and 20x4 | ||
Assets | 20x5 | 20x4 |
Cash | $ 140 | $ 140 |
Accounts receivable (net) | 210 | 280 |
Inventory | 350 | 420 |
Prepaid expenses | 105 | 70 |
Equipment (net) | 3,010 | 2,800 |
Investments and other assets | 4,900 | 4,200 |
Total assets | $8,715 | $7,910 |
Liabilities and Stockholders' Equity | ||
Accounts payable | $ 350 | $ 280 |
Income taxes payable | 70 | 140 |
Long-term note payable | 2,100 | 1,400 |
Common stock | 1,400 | 1,400 |
Retained earnings | 4,795 | 4,690 |
Total liabilities and stockholders' equity | $8,715 | $7,910 |
Additional information:
Depreciation expense $560
Cash dividends declared and paid 50
a. Compute net income, assuming net income and the cash dividends were the only items affecting retained earnings. Show your work.
b. Compute net cash flows from operating activities using the indirect method.
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