Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 2048, is as follows: Dec. 31, 2019

image text in transcribedimage text in transcribedimage text in transcribed

Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 2048, is as follows: Dec. 31, 2019 Dec. 31, 2018 Assets Cash $236,380 $220,140 85,630 79,070 241,730 234,090 Accounts receivable (net) Inventories Investments Land 0 90,690 0 123,990 266,710 206,970 Equipment Accumulated depreciation-equipment (62,440) (55,810) Total assets $892,000 $775,150 $161,450 $152,700 16,060 20,150 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par Paid-in capital: Excess of issue price over par-common stock Retained earnings 8,920 6,980 48,170 37,980 181,080 105,420 476,320 451,920 Total liabilities and stockholders' equity $892,000 $775,150 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 $81,620 cash. d. The common stock was issued for cash. e. There was a $60,830 credit to Retained Earnings for net income. f. There was a $36,430 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, or any negative adjustments. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31, 2019 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Loss 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 onerating activities Loss 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 from sale of common stock Cash used for dividends $ Net cash flow used for investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities $ Cash at the beginning of the year Cash at the end of the year $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

College Accounting, Chapters 1-15

Authors: James A. Heintz, Robert W. Parry

21st Edition

1285639723, 9781285639727

More Books

Students also viewed these Accounting questions

Question

=+2. Why does the brand want to advertise?

Answered: 1 week ago