Author Question: Alma Ortiz prepared Carlee Instruments' balance sheet and income statement for 2021. Before she ... (Read 43 times)

aeb093 · **on:** Feb 5, 2023

Alma Ortiz prepared Carlee Instruments' balance sheet and income statement for 2021. Before she could complete the statement of cash flows, she had to leave town to attend to a family emergency. Because the full set of statements must be provided to the auditors today, Carlee's president, Mike Lymon, has asked you to prepare the statement of cash flows. Lymon has provided you with the balance sheet and income statement that Ortiz prepared, as well as some notes she made:

Carlee Instruments

Income Statement

For the Year Ended December 31, 2021

Sales revenue

$127,900

Cost of goods sold

69,800

Gross margin

58,100

Selling expense

$13,000

Administrative expense

8,000

Salaries expense

20,000

Depreciation expense

1,500

Interest expense

4,000

46,500

Income before gain and taxes

11,600

Gain on sale of land

900

Income tax expense

800

Net income

$ 11,700

Carlee Instruments

Comparative Balance Sheets

As of December 31

2021

2020

Cash

$ 6,100

$ 4,300

Accounts receivable, net

6,800

5,500

Inventory

33,700

34,200

Total current assets

46,600

44,000

Property, plant, & equipment, net

211,900

214,300

Total Assets

$258,500

$258,300

Accounts payable

$ 3,400

$ 4,900

Accrued expenses

500

700

Salaries payable

1,900

1,500

Taxes payable

2,100

2,600

Note payable

60,500

50,000

Total liabilities

68,400

59,700

Common stock

125,000

Retained earnings

65,100

73,600

Total stockholders' equity

190,100

198,600

Total liabilities & stockholders' equity

$258,500

$258,300

•	Equipment with an original cost of $35,000 was sold for $20,300. The book value

of the equipment was $19,400.

•	On June 1, 2021, the company purchased new equipment for cash at a cost of $18,500.

•	At the end of the year the company issued notes payable for $10,500 cash. The note

will
mature on December 31, 2024.

•	The company paid $20,200 in cash dividends for the year.

Required:

Using the direct method, prepare Carlee Instruments' statement of cash flows for 2021.

Sophia0717 · **Reply #1 on:** Feb 5, 2023

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