Question

Carla Vista Ltd., which follows ASPE, had the following comparative Statement of Financial Position: Carla Vista Ltd. Comparative Statement of Financial Position March 31 Assets 2020 2021 $ 19,380 68,400 95,760 6,840 285,000 $ 13,680 45,600 79,800 4,560 239,400 (54,720) $ 328,320 (68,400) $ 406,980 Cash Accounts receivable Inventory Prepaid expenses Property, plant, and equipment Accumulated depreciation Total assets Liabilities and Shareholders' Equity Accounts payable Interest payable Income taxes payable Bonds payable Common shares Retained earnings $ 39,900 3,420 25,080 102,600 $ 45,600 4,560 13,680 72,960 91,200 100,320 108,300 127,680

Answer 1

Solution

Carla Vista Ltd.
Cash Flow Statement
For the year ended March 31, 2021
Cash Flow from Operating Activities:
Net Income (loss)		$          43,320.00
Add: Adjustments to reconcile net income to
Net cash from operating activities
Depreciation expense	$        27,360.00
Loss of sale of Equipment	$           6,840.00
Change in current assets and current liabilities
Increase in accounts receivable	$      (22,800.00)
Increase in inventory	$      (15,960.00)
Increase in prepaid expense	$        (2,280.00)
Decrease in accounts payable	$        (5,700.00)
Decrease in interest payable	$        (1,140.00)
Increase in income tax payable	$        11,400.00
		$          (2,280.00)
A. Cash Flow from Operating Activities		$          41,040.00
Cash Flow from Investing Activities:
Sale of Equipment	$        13,680.00
Purchase of equipment	$      (79,800.00)
B. Cash flow from Investing Activities		$        (66,120.00)
Cash Flow from Financing Activities:
Proceeds from bonds issue	$        29,640.00
Proceeds from common stock issue	$        17,100.00
Payment of Dividends	$      (15,960.00)
C. Cash Flow from Financing Activities		$          30,780.00
Increase (Decrease) in cash [A+B+C]		$            5,700.00
Add: cash at the beginning of the year		$          13,680.00
Cash at the end of the year		$          19,380.00