The comparative balance sheet $of$ Merrick Equipment $Co.$ for December $31,20Y9$ and $20Y8,isas$ follows:

Line Item Description December $31,20Y9$ December $31,20Y8$

Assets

Cash $$70,720$ $$47,940$

Accounts receivable $(net)207,230188,190$

Inventories $298,520289,850$

Investments $0102,000$

Land $295,8000$

Equipment $438,600358,020$

Accumulated depreciation$-$equipment $(99,110)(84,320)$

Total assets $$1,211,760$ $$901,680$

Liabilities and Stockholders' Equity

Accounts payable $(merchandise$ creditors$)$ $$205,700$ $$194,140$

Accrued expenses payable $(operating$ expenses$)30,60026,860$

Dividends payable $25,50020,400$

Common stock, $$1$ par $202,000102,000$

Paid$-in$ capital $in$ excess $of$ par$-$common stock $354,000204,000$

Retained earnings $393,960354,280$

Total liabilities and stockholders' equity $$1,211,760$ $$901,680$

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 $$91,800$ cash.

The common stock was issued for cash.

There was $a$ $$141,680$ credit $to$ Retained Earnings for net income.

There was $a$ $$102,000$ debit $to$ Retained Earnings for cash dividends declared.

Required:

Prepare a statement $of$ cash flows, using the indirect method $of$ presenting cash flows from $(used$ for$)$ 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 $31,20Y9$

Line Item Description Amount Amount

Cash flows from $(used$ for$)$ operating activities:

Net income

$Net income

$141,680$

Adjustments $to$ reconcile net income $to$ net cash flows from $(used$ for$)$ operating activities:

Depreciation

Depreciation

$99,110$

Gain $on$ sale $of$ investments

Gain $on$ sale $of$ investments

Changes $in$ current operating assets and liabilities:

Increase $in$ accounts receivable

Increase $in$ accounts receivable

$19,040$

Increase $in$ inventories

Increase $in$ inventories

$8,670$

Increase $in$ accounts payable

Increase $in$ accounts payable

$11,560$

Increase $in$ accrued expenses payable

Increase $in$ accrued expenses payable

$3,740$

Net cash flows used for operating activities

$Net cash flows used for operating activities

$198,780$

Cash flows from $(used$ for$)$ investing activities:

Cash received from sale $of$ investments

$Cash received from sale $of$ investments

$91,800$

Cash paid for purchase $of$ land

Cash paid for purchase $of$ land

$295,800$

blank

Cash paid for purchase $of$ equipment

Cash paid for purchase $of$ equipment

$80,580$

Net cash flows used for investing activities

Net cash flows used for investing activities

$284,580$

Cash flows from $(used$ for$)$ financing activities:

Cash received from sale $of$ common stock

$Cash received from sale $of$ common stock

$100,000$

Cash paid for dividends

Cash paid for dividends

$102,000$

Net cash flows from financing activities

Net cash flows from financing activities

$2,000$

Net increase $in$ cash

$Net increase $in$ cash

$87,800$

Cash balance, January $1,20Y9$ Cash balance, January $1,20Y9$

$47,940$

Cash balance, December $31,20Y9$ $Cash balance, December $31,20Y9$

$-39,860$Statement $of$ cash flows$-$indirect method

The comparative balance sheet $of$ Merrick Equipment $Co.$ for December $31,20V9$ and $20V8,isas$ follows:

December December

$31,20Y9,31,20Y8$

Additional data obtained from $an$ examination $of$ the accounts $in$ the ledger for $20V9$ 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 $$91,800$ cash.

$d.$ The common stock was issued for cash.

$e.$ There was $a$ $$141,680$ credit $to$ Retained Earnings for net income.

$f.$ There was $a$ $$102,000$ debit $to$ Retained Earnings for cash dividends declared.

Required:

Merrick Equipment $Co.$

Statement $of$ Cash Flows

For the Year Ended December $31,20Y9$

Line Item Description

Cash flows from $(used$ for$)$ operating activities:

Net income

Adjustments $to$ reconcile net income $to$ net cash flows from $(used$ for$)$ operating activities:

Gain $on$ sale $of$ investments $-x$

Changes $in$ current operating assets and liabilities:

Increase $in$ accounts receivable $*$

Increase $in$ inventories $$

Increase $in$ accounts payable $*$

Increase $in$ accrued expenses payable $*$

Net cash flows used for operating activities $x$

Cash flows from $(used$ for$)$ investing activities:

Cash received from sale $of$ investments $$

Cash paid for purchase $of$ land $v$

Cash paid for purchase $of$ equipment $$

Net cash flows used for investing activities The comparative balance The comparative balance sheet $of$ Merrick Equipment $Co.$ for December $31,20Yg$ and $20Y8,isas$ follows: