Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 2088, is as follows: Dec. 31, Dec. 31, 20Y8 2019 Assets Cash $303,740 $283,200 Accounts receivable (net) 110,030 101,710 Inventories 310,610 301,150 Investments 0 116,670 Land 159,320 0 Equipment Accumulated depreciation-equipment 342,710 (80,230) 266,250 (71,800) $997,180 Total assets $1,146,180 $207,460 $196,440 Liabilities and Stockholders' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par 20,630 25,930 11,460 8,970 61,890 48,860 Pald-in capital: Excess of issue price over par.common stock 232,670 135,620 Pad-in capitale excess of issue price over par-common stock 232,670 135,620 Retained earnings 612,070 581,360 Total liabilities and stockholders' equity $1,146,180 $997,180 Additional data obtained from an examination of the accounts in the ledger for 2019 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 $105,000 cash. d. The common stock was issued for cash. e. There was a $77,580 credit to Retained Earnings for net income. f. There was a $46,870 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 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 00 1100 QUI 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: Changes in current operating assets and abilities: 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 1111 Qul 10 ] I OQO Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash from sale of common stock Cash used for dividends Net cash flow from financing activities Increase in cash Cash at the beginning of the year Cash at the end of the year
