Question
Statement of Cash FlowsIndirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows: Dec. 31, 20Y9
Statement of Cash FlowsIndirect Method
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:
| Dec. 31, 20Y9 | Dec. 31, 20Y8 | ||||
| Assets | |||||
| Cash | $314,850 | $290,180 | |||
| Accounts receivable (net) | 114,060 | 104,220 | |||
| Inventories | 321,980 | 308,580 | |||
| Investments | 0 | 119,550 | |||
| Land | 165,150 | 0 | |||
| Equipment | 355,240 | 272,810 | |||
| Accumulated depreciationequipment | (83,170) | (73,570) | |||
| Total assets | $1,188,110 | $1,021,770 | |||
| Liabilities and Stockholders' Equity | |||||
| Accounts payable (merchandise creditors) | $215,050 | $201,290 | |||
| Accrued expenses payable (operating expenses) | 21,390 | 26,570 | |||
| Dividends payable | 11,880 | 9,200 | |||
| Common stock, $10 par | 64,160 | 50,070 | |||
| Paid-in capital in excess of parcommon stock | 241,190 | 138,960 | |||
| Retained earnings | 634,440 | 595,680 | |||
| Total liabilities and stockholders equity | $1,188,110 | $1,021,770 | |||
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 $139,870 cash.
- The common stock was issued for cash.
- There was a $86,780 credit to Retained Earnings for net income.
- There was a $48,020 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, 20Y9 | ||
| Cash flows from (used for) 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 operating activities | ||
| Cash flows from (used for) investing activities: | ||
| cash from sale of investments | ||
| cash used for purchase of land | ||
| cash used for purchase of equipment | ||
| Net cash flow used for investing activities | ||
| Cash flows from (used for) financing activities: | ||
| cash from sale common stock | ||
| cash used for dividends | ||
| Net cash flow from financing activities | ||
| increase in cash | ||
| Cash balance, January 1, 20Y9 | ||
| Cash balance, December 31, 20Y9 | ||
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappett
23rd edition
978-1259536359
