Question

Requirement 1. Prepare the statement of cash flows of Carbon Educational Supply for the year ended December 31, 2018 Uke the indirect method to report cash Bows from operating activities (use a minus sign or parentheses for amounts that rein a decrease in casa box in oned in the statement leave the box empty do not select a laborator a zero) Complete the woment one section at a time, beginning with the cash flows from operating activities Carlson Educational Supply Statement of Cash Flows Year Ended December 31, 2018 Cash Flows from Operating Activities Net Incom Adjustments to Recondi Net Income to Na Cash Provided by used for Operating Activities Chem or entrany number the w a nden Check

Answer 1

Carlson Educational Supply
Statement of Cash Flows
Year Ended December 31,2018
Cash Flows from operating activities:
Net income		$65,600
Adjustments to Reconcile net income to net cash
Provided by (used for ) Operating activities:
Depreciation expense	$16,600
Decrease in accounts receivable	$6,400
Increase in merchandise inventory	($4,600)
Increase in accounts payable	$5,000
Decrease in accrued liabilities	($600)	$22,800
Net Cash Flows from operating activities (i)		$88,400
Cash Flows from investing activities:
Purchase of equipment	($53,900)
Purchase of building with cash	($104,000)
Net Cash Flows from investing activities (ii)		($157,900)
Cash Flows from financing activities:
Issuance of common stock	$104,000
Issuance of long-term notes payable	$54,000
Payment of cash dividends	($19,200)
Net Cash Flows from financing activities (iii)		$138,800
Net increase(decrease) in cash (i)+(ii)+(iii)		$69,300
Beginning cash balance		$18,000
Ending cash balance		$87,300

Free cash flows = Cash from operations - Capital expenditures

= $88,400- (53,900 purchase of equipment-$104,000 purchase of building)

=($69,500)