Question

Shown below are comparative balance sheets for Carla Vista Company. Carla Vista Company Comparative Balance Sheets December 31 Assets 2017 2016 Cash $ 165,172 $ 53,438 Accounts receivable 213,752 184,604 Inventory 405,643 459,081 Land 194,320 242,900 Equipment 631,540 485,800 Accumulated depreciation—equipment (160,314 ) (77,728 ) Total $1,450,113 $1,348,095 Liabilities and Stockholders’ Equity Accounts payable $ 94,731 $ 104,447 Bonds payable 364,350 485,800 Common stock ($1 par) 524,664 422,646 Retained earnings 466,368 335,202 Total $1,450,113 $1,348,095 Additional information: 1. Net income for 2017 was $225,897. 2. Depreciation expense was $82,586. 3. Cash dividends of $94,731 were declared and paid. 4. Bonds payable amounting to $121,450 were redeemed for cash $121,450. 5. Common stock was issued for $102,018 cash. 6. No equipment was sold during 2017. 7. Land was sold for its book value. Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000, or in parenthesis e.g. (15,000)).

Answer 1

Answer:

Cash Flow :  $111,734  

Please see details below:

Explanation:

Assets 2017 2016

Cash  $165,172   $53,438  

Accounts Receivable  $213,752   $184,604  

Inventory  $405,643   $459,081  

TOTAL CURRENT ASSETS   $784,567   $697,123  

Property and Equipment  $471,226   $408,072  

Land  $194,320   $242,900  

TOTAL ASSETS   $1,450,113   $1,348,095  

Accounts Payable   $94,731   $104,447  

Bonds Payable   $364,350   $485,800  

TOTAL CURRENT LIABILITIES   $459,081   $590,247  

TOTAL LIABILITIES   $459,081   $590,247  

Common Stock   $524,664   $422,646  

Retained Earnings   $466,368   $335,202  

TOTAL EQUITY   $991,032   $757,848  

TOTAL EQUITY + LIABILITIES   $1,450,113   $1,348,095  

Cash Flow Ind Method $111,734  

Net Income   $225,897  

Depreciation   $82,586  

Dividends  -$94,731  

Bonds Payables  -$121,450  

Stock Issued   $102,018  

Land Sold  -$48,580  

Accounts Payables  -$9,716  

Inventory  -$53,438  

Accounts Receivable   $29,148  

The amount of Cash Flow by indirect method can be verified by the difference in the Cash on Balance Sheet between one year and other.

Assets 2017 2016

Cash  $165,172   $53,438   = $111,734