Exercise 13-7

The following three accounts appear in the general ledger of Herrick Corp. during 2020.

Equipment
Date				Debit		Credit		Balance
Jan. 1		Balance						161,200
July 31		Purchase of equipment		71,200				232,400
Sept. 2		Cost of equipment constructed		53,300				285,700
Nov. 10		Cost of equipment sold				49,000		236,700
Accumulated DepreciationEquipment
Date				Debit		Credit		Balance
Jan. 1		Balance						72,000
Nov. 10		Accumulated depreciation on equipment sold		29,300				42,700
Dec. 31		Depreciation for year				24,800		67,500
Retained Earnings
Date				Debit		Credit		Balance
Jan. 1		Balance						105,700
Aug. 23		Dividends (cash)		17,400				88,300
Dec. 31		Net income				66,800		155,100

From the postings in the accounts, indicate how the information is reported on a statement of cash flows using the indirect method. The loss on disposal of plant assets was $5,200. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $53,300.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

HERRICK CORP Partial Statement of Cash Flows choose the accounting period For the Month Ended December 31, 2020December 31, 2020For the Year Ended December 31, 2020
select an opening name for section one Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
select an item Depreciation Expense Payment of Cash Dividends Net Income Loss on Disposal of Plant Assets Sale of Equipment Purchase of Equipment Construction of Equipment Increase in Accounts Receivable Decrease in Accounts Payable		$enter a dollar amount
Adjustments to reconcile net income to
select a subsection name Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
select an item Net Income Purchase of Equipment Sale of Equipment Depreciation Expense Construction of Equipment Decrease in Accounts Payable Increase in Accounts Receivable Payment of Cash Dividends Loss on Disposal of Plant Assets	$enter a dollar amount
select an item Payment of Cash Dividends Loss on Disposal of Plant Assets Increase in Accounts Receivable Decrease in Accounts Payable Construction of Equipment Net Income Depreciation Expense Sale of Equipment Purchase of Equipment	enter a dollar amount
		enter a subtotal of the adjustments
select a closing name for section one Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash		enter a total amount for section one
select an opening name for section two Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
select an item Decrease in Accounts Payable Sale of Equipment Purchase of Equipment Construction of Equipment Payment of Cash Dividends Increase in Accounts Receivable Net Income Depreciation Expense Loss on Disposal of Plant Assets	enter a dollar amount
select an item Sale of Equipment Purchase of Equipment Depreciation Expense Net Income Payment of Cash Dividends Construction of Equipment Loss on Disposal of Plant Assets Increase in Accounts Receivable Decrease in Accounts Payable	enter a dollar amount
select an item Loss on Disposal of Plant Assets Construction of Equipment Payment of Cash Dividends Increase in Accounts Receivable Net Income Purchase of Equipment Sale of Equipment Depreciation Expense Decrease in Accounts Payable	enter a dollar amount
select a closing name for section two Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash		enter a total amount for section two
select an opening name for section three Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
select an item Net Income Depreciation Expense Loss on Disposal of Plant Assets Sale of Equipment Purchase of Equipment Construction of Equipment Payment of Cash Dividends Increase in Accounts Receivable Decrease in Accounts Payable		enter a dollar amount