Question
Statement of Cash FlowsIndirect Method The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2
Statement of Cash FlowsIndirect Method
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
Dec. 31, 20Y2 | Dec. 31, 20Y1 | ||||
Assets | |||||
Cash | $180 | $59 | |||
Accounts receivable (net) | 103 | 73 | |||
Inventories | 65 | 40 | |||
Land | 148 | 165 | |||
Equipment | 83 | 64 | |||
Accumulated depreciation-equipment | (22) | (11) | |||
Total Assets | $557 | $390 | |||
Liabilities and Stockholders' Equity | |||||
Accounts payable (merchandise creditors) | $70 | $59 | |||
Dividends payable | 11 | - | |||
Common stock, $1 par | 37 | 18 | |||
Paid-in capital: Excess of issue price over parcommon stock | 89 | 46 | |||
Retained earnings | 350 | 267 | |||
Total liabilities and stockholders' equity | $557 | $390 |
The following additional information is taken from the records:
- Land was sold for $43.
- Equipment was acquired for cash.
- There were no disposals of equipment during the year.
- The common stock was issued for cash.
- There was a $120 credit to Retained Earnings for net income.
- There was a $37 debit to Retained Earnings for cash dividends declared.
a. Prepare a statement of cash flows, using the indirect 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.
Olson-Jones Industries Inc. | ||
Statement of Cash Flows | ||
For the Year Ended December 31, 20Y2 | ||
Cash flows from operating activities: | ||
Net income | $ | |
Adjustments to reconcile net income to net cash flow from operating activities: | ||
Depreciation | ||
Gain on sale of land | ||
Changes in current operating assets and liabilities: | ||
Increase in accounts receivable | ||
Increase in inventories | ||
Increase in accounts payable | ||
Net cash flow from operating activities | $ | |
Cash flows from (used for) investing activities: | ||
Cash from sale of land | $ | |
Cash used for purchase of equipment | ||
Net cash flow from 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 | $ |
b. Was Olson-Jones Industries Inc.s net cash flow from operations more or less than net income? More
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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 $263,410 $246,720 Accounts receivable (net) 95,420 88,610 Inventories 269,380 262,370 Investments 0 101,640 Land 138,160 0 Equipment 297,200 231,960 Accumulated depreciationequipment (69,580) (62,550) Total assets $993,990 $868,750 Liabilities and Stockholders' Equity Accounts payable $179,910 $171,140 Accrued expenses payable 17,890 22,590 Dividends payable 9,940 7,820 Common stock, $10 par 53,680 42,570 Paid-in capital: Excess of issue price over par-common stock 201,780 118,150 Retained earnings 530,790 506,480 Total liabilities and stockholders equity $993,990 $868,750 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 $91,480 cash.
- The common stock was issued for cash.
- There was a $65,140 credit to Retained Earnings for net income.
- There was a $40,830 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 operating activities: $ Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities $ Cash flows from (used for) investing activities: $ 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 $
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