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, 2019 Dec. 31, 2048 Assets Cash $307,880 $289,700 Accounts receivable (net) 111,530 104,050 Inventories 314,860 308,060 Investments 119,350 Land 161,490 0 Equipment 347,380 272,360 Accumulated depreciation equipment (81,330) (73,450) Total assets $1,161,810 $1,020,070 0 Liabilities and Stockholders' Equity $210,290 $200,950 Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable 20,910 26,520 11,620 9,180 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $210,290 $200,950 Accrued expenses payable (operating expenses) 20,910 26,520 Dividends payable 11,620 9,180 Common stock, $10 par 62,740 49,980 Paid-in capital in excess of par-common stock 235,850 138,730 Retained earnings 620,400 594,710 Total liabilities and stockholders' equity $1,161,810 $1,020,070 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 $139,640 cash. d. The common stock was issued for cash. e. There was a $73,630 credit to Retained Earnings for net income. f. There was a $47,940 debit to Retained Earnings for cash dividends declared. Required: 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, on any negative adjustments Required: 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, 2049 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 Decrease in inventories Decrease 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 Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventories Decrease 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 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
