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Statement of Cash FlowsDirect Method applied to PR 13-1B The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is: Dec.
Statement of Cash FlowsDirect Method applied to PR 13-1B
The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is:
Dec. 31, 20Y9 | Dec. 31, 20Y8 | ||||
Assets | |||||
Cash | $70,720 | $47,940 | |||
Accounts receivable (net) | 207,230 | 188,190 | |||
Inventories | 298,520 | 289,850 | |||
Investments | 0 | 102,000 | |||
Land | 295,800 | 0 | |||
Equipment | 438,600 | 358,020 | |||
Accumulated depreciationequipment | (99,110) | (84,320) | |||
Total assets | $1,211,760 | $901,680 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable (merchandise creditors) | $205,700 | $194,140 | |||
Accrued expenses payable (operating expenses) | 30,600 | 26,860 | |||
Dividends payable | 25,500 | 20,400 | |||
Common stock, $1 par | 202,000 | 102,000 | |||
Paid-in capital: Excess of issue price over parcommon stock | 354,000 | 204,000 | |||
Retained earnings | 393,960 | 354,280 | |||
Total liabilities and stockholders' equity | $1,211,760 | $901,680 |
The income statement for the year ended December 31, 20Y9, is as follows:
Sales | $2,023,898 | |
Cost of goods sold | 1,245,476 | |
Gross profit | $778,422 | |
Operating expenses: | ||
Depreciation expense | $14,790 | |
Other operating expenses | 517,299 | |
Total operating expenses | 532,089 | |
Operating income | $246,333 | |
Other expenses: | ||
Loss on sale of investments | (10,200) | |
Income before income tax | $236,133 | |
Income tax expense | 94,453 | |
Net income | $141,680 |
Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:
- Equipment and land were acquired for cash.
- There were no disposals of equipment during the year.
- The investments were sold for $91,800 cash.
- The common stock was issued for cash.
- There was a $102,000 debit to Retained Earnings for cash dividends declared.
Required:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
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