Problem 1 (20 points)

The following is a comparative balance sheet for Carlton Corporation’s December 31, 2020,
year-end and select other financial information.

Carlton Corporation
Balance Sheet
December 31
2020 2019
Cash $ 38,700 $ 10,000
Accounts receivable (net) 42,000 20,500
Inventory 35,000 42,000
Long-term investments 0 15,000
Property, plant & equipment 225,000 160,000
Accumulated depreciation (37,700) (25,000)
$303,000 $222,500

Accounts payable $ 17,000 $ 26,500

Accrued liabilities 21,000 17,000
Long-term notes payable 70,000 50,000
Common stock 130,000 100,000
Retained earnings 65,000 29,000
$303,000 $222,500

Additional data:
1. Net income for the year 2020 is $51,000.
2. Carlton Corporation sold its only long-term investments for $25,000 (assume any gain or
loss is ordinary).
3. Declared and paid cash dividends during 2020.
4. Purchased new equipment for cash. No other PPE was purchased or sold in 2020.
5. Additional shares of common stock were issued in 2020 for cash.
6. Carlton Corporation borrowed additional funds through LT notes payable.

Instructions
On the next page, prepare Carlton Corporation's statement of cash flows (using the indirect
method) for 2020. Please show your work to support any calculations used. Add additional
pages is necessary. NOTE: You are not required to fill in all the boxes provided.
 Carlton Corporation
Statement of Cash Flows
For the Year Ended December 31, 2020
       
Cash Flow from Operating Activities:    
 
Adjustments to reconcile net income to net
  cash provided by operating activities:
 

 
 

  Net cash provided (used) by operating activities

   
Cash flows from investing activities
 

  Net cash provided (used) by investing activities

   
Cash flow from financing Activities:
 

 
  Net cash provided (used) by financing activities
   
Net increase (decrease) in cash
Cash, January 1, 2020
Cash, December 31, 2020