Exercise 12-7 Shown below are comparative balance sheets for Carla Vista Company

Question

Exercise 12-7 Shown below are comparative balance sheets for Carla Vista Company Carla Vista Company Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total 2016 $ 53,438 184,604 459,081 242,900 485,800 (77,728) 2017 $165,172 213,752 405,643 194,320 631,540 (160,314) $1,450,113 $1,348,095 $ 104,447 485,800 422,646 335,202 $1,450,113 $1,348,095 $94,731 364,350 524,664 466,368

Explanation / Answer

CARLA VISTA COMPANY Statement of Cash Flows For the Year Ended December 31, Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Net income             225,897 Depreciation expense              82,586 Decrease in Inventory 459081-405643 53438 Increase in accounts receivable 184604-213752 -29148 Decrease in accounts payable -104447+94731              (9,716)            97,160 Net cash provided by operating activities          323,057 Cash flows from investing activities Sales on land 242900-194320              48,580 Purchase of equipment 485800-631540         (145,740) Net cash used by investing activities          (97,160) Cash flows from financing activities Issuance of common stock 524664-422646           102,018 Payment of cash dividends           (94,731) Redemption of bonds         (121,450) Net used by financing activities         (114,163)       (114,163) Net Increase in cash          111,734 Cash at beginning of period            53,438 Cash at end of period          165,172

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