Question

Selected financial statement information and additional data for Carla Vista Co. is presented below.

			December 31
			2019		2020
Cash			$41,000		$80,800
Accounts receivable (net)			83,000		141,000
Inventory			168,000		202,000
Land			58,000		18,000
Equipment			502,000		788,000
	TOTAL		$852,000		$1,229,800
Accumulated depreciation			$85,000		$117,000
Accounts payable			50,000		86,000
Notes payable - short-term			67,000		31,000
Notes payable - long-term			167,000		302,000
Common stock			423,000		491,000
Retained earnings			60,000		202,800
	TOTAL		$852,000		$1,229,800

Additional data for 2020:
1.		Net income was $224,000.
2.		Depreciation was $32,000.
3.		Land was sold at its original cost.
4.		Dividends of $81,200 were paid.
5.		Equipment was purchased for $83,000 cash.
6.		A long-term note for $203,000 was used to pay for an equipment purchase.
7.		Common stock was issued to pay a $68,000 long-term note payable.

Prepare a statement of cash flows for the year ending December 31, 2020. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Carla Vista Co
Statement of Cash flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Net Income		$    224,000
Adjustments to reconcile net income to ;
Depreciation expense	$    32,000
Increase in accounts receivable	$ (58,000)
Increase in inventory	$ (34,000)
Decrease in accounts payable	$    36,000
		$    (24,000)
Net cash provided by operating activities		$    200,000
Cash flows from investing activities
Cash received from Sale of land	$    40,000
Cash paid for purchase of equipment	$ (83,000)
Net cash used by investing activities		$    (43,000)
Cash flows from financing activities
Payment of dividends	$ (81,200)
Repayment of short term note	$ (36,000)
Net cash used by financing activities		$ (117,200)
Net Increase in cash		$       39,800
Cash and cash equivalents at beginning of period		$       41,000
Cash and cash equivalents at end of period		$       80,800
Non cash investing and financing activities
Acquisition of equipment by issuing long term note		$     203,000
Common stock issued to repay long term note		68000

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