Question 1) The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows: (Pictures/more info below). Prepare a statement of cash flows, using the indirect method of presenting cash flows of operating activities. Using the minus sign to indicate cash outflows, cash payments, decreases in cash, or any adjustments: (Pictures/more info below)
Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 20Y8, is as follows: Dec. 31, 2079 Dec. 31, 2018 Assets Cash $231,110 $216,220 Accounts receivable (net) 83,720 77,660 Inventories 236,350 229,930 Investments 0 89,080 Land 121,220 Equipment 260,760 203,280 Accumulated depreciation equipment (61,050) (54,820) Total assets $872,110 $761,350 Liabilities and Stockholders' $157,850 $149,990 Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable 15,700 19,800 8,720 6,850 Common stock, $10 par 47,090 37,310 Paid-in capital in excess of par-common stock 177,040 103,540 Retained earnings 465,710 443,860 Total liabilities and stockholders' equity $872,110 $761,350 Additional data obtained from an examination of the accounts in the ledger for 2049 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $104,220 cash. d. The common stock was issued for cash. e. There was a $57,630 credit to Retained Earnings for net income. f. There was a $35,780 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments bi bilo doo Do 0 Cash paid for purchase of land Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 2019 Cash balance, December 31, 2049
