Alma Ortiz Prepared Carlee Instruments' Balance Sheet and Income Statement $\bullet$

question 70

Essay

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: $\bullet$ Equipment with an original cost of $35,000 was sold for $20,300.The book value of the equipment was $19,400.
$\bullet$ On June 1, 2021, the company purchased new equipment for cash at a cost of $18,500.
$\bullet$ At the end of the year the company issued notes payable for $10,500 cash.The note will mature on December 31, 2024.
$\bullet$ 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.

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Definitions:

Vertical Merger

A business strategy where a company merges with another company that operates in the same industry but at a different stage of the production process.

Supplier-Customer Relationships

The interactions and transactions between a provider of goods or services and the entity that purchases them.

Friendly Merger

A merger agreed upon by all parties involved, where both companies' leadership are willing participants in the negotiation process.

Target's Management

The executive and leadership team of a company that is being considered for acquisition or merger.