Exercise 23-12 Condensed financial data of Carla Company for 2017 and 2016 are p

Question

Exercise 23-12

Condensed financial data of Carla Company for 2017 and 2016 are presented below.

CARLA COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

$1,790

$1,170

1,780

1,310

1,580

1,900

1,900

1,720

(1,180

(1,140

1,310

1,420

$7,180

$6,380

$1,220

$880

210

240

1,380

1,550

1,930

1,660

2,440

2,050

$7,180

$6,380

CARLA COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

$6,690

4,650

2,040

930

1,110

90

1,200

550

260

$390

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

Prepare a statement of cash flows using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

CARLA COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

Cash

$1,790

$1,170

Receivables

1,780

1,310

Inventory

1,580

1,900

Plant assets

1,900

1,720

Accumulated depreciation

(1,180

)

(1,140

) Long-term investments (held-to-maturity)

1,310

1,420

$7,180

$6,380

Accounts payable

$1,220

$880

Accrued liabilities

210

240

Bonds payable

1,380

1,550

Common stock

1,930

1,660

Retained earnings

2,440

2,050

$7,180

$6,380

CARLA COMPANY Strtement of Cash Flows (Direct Method)

Explanation / Answer

STATEMENT OF CASH FLOWS (DIRECT METHOD) Cash flows from operating activities: Cash collected from receivables (6690+1310-1780) 6220 Cash paid to suppliers (4650+880-1220+1580-1900) -3990 Cash for S&A expenses and income tax (930+550+240-210-40 Depreciation) -1470 Net cash provided by operating activities 760 Cash flows from investing activities: Purchase of plant assets (1900-70-1720)) -110 Sale of investments (1420-1310+90) 200 Net cash used by operating activities 90 Cash flows from financing activities: Common stock issued (1930-70-1660) 200 Bonds payable redeemed (1550-1380) -170 Dividends paid -260 Net cash used by financing activities -230 Decrease in cash and cash equivalents 620 Beginning balance of cash and cash equivalents 1170 Ending balance of cash and cash equivalents 1790 Note: During the year, $70 of common stock was issued in exchange for plant assets.

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