The following additional information is taken from the records:

1. Land was sold for $50.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $117 credit to Retained Earnings for net income.
6. There was a $36 debit to Retained Earnings for cash dividends declared.

Question Content Area

a. 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 out flows, cash payments, decreases in cash, or any negative adjustments.

Cash flows from (used for) operating activities:
Cash received from sale of common stockDecrease in accounts receivableIncrease in inventoriesNet incomeNet loss	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:
Decrease in accounts receivableDepreciationGain on sale of landIncrease in accounts receivableLoss on sale of land	- Select -
Cash dividendsDecrease in inventoriesGain on sale of landIncrease in accounts payableLoss on sale of land	- Select -
Changes in current operating assets and liabilities:
Decrease in accounts receivableDecrease in inventoriesDepreciationIncrease in accounts receivableNet income	- Select -
Decrease in accounts payableDecrease in accounts receivableDecrease in inventoriesIncrease in inventoriesNet income	- Select -
Cash paid for dividendsDecrease in accounts payableDepreciationIncrease in accounts payableNet income	- Select -
Net cash flow from operating activities		$fill in the blank abd44c005f83fe0_13
Cash flows from (used for) investing activities:
Cash paid for dividendsCash received from sale of landDepreciationGain on sale of landIncrease in accounts receivable	$- Select -
Cash paid for purchase of equipmentDecrease in accounts receivableDepreciationIncrease in accounts payableIncrease in inventories	- Select -
Net cash flow from investing activities		fill in the blank abd44c005f83fe0_18
Cash flows from (used for) financing activities:
Cash received from issuing common stockCash received from sale of landDecrease in accounts payableDepreciationNet income	$- Select -
Cash dividendsCash received from sale of landDecrease in inventoriesGain on sale of landIncrease in accounts receivable	- Select -
Net cash flows from financing activities		fill in the blank abd44c005f83fe0_23
DepreciationNet decrease in cashNet incomeNet increase in cashNet loss		$- Select -
Cash balance, January 1, 20Y2		fill in the blank abd44c005f83fe0_26
Cash balance, December 31, 20Y2		$fill in the blank abd44c005f83fe0_27

Question Content Area

b. Was Hirayama Industries Inc.s net cash flows from operations more or less than net income?

LessMore

Statement of Cash Flows

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		$225,850		$212,760
Accounts receivable (net)		81,820		76,410
Inventories		230,960		226,240
Investments		0		87,650
Land		118,460		0
Equipment		254,830		200,020
Accumulated depreciationequipment		(59,660)		(53,940)
Total assets		$852,260		$749,140
Liabilities and Stockholders' Equity
Accounts payable		$154,260		$147,580
Accrued expenses payable		15,340		19,480
Dividends payable		8,520		6,740
Common stock, $10 par		46,020		36,710
Excess of paid-in capital over par		173,010		101,880
Retained earnings		455,110		436,750
Total liabilities and stockholders' equity		$852,260		$749,140

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

1. Equipment and land were acquired for cash.
2. There were no disposals of equipment during the year.
3. The investments were sold for $78,890 cash.
4. The common stock was issued for cash.
5. There was a $53,570 credit to Retained Earnings for net income.
6. There was a $35,210 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.

Cash flows from (used for) operating activities:	blank
Cash dividendsCash paid for landCash received from issuing common stockCash received from sale of investmentsNet income	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:	blank
Cash dividendsCash paid for landCash received from issuing common stockDepreciationRetained earnings	- Select -
Cash received from net incomeCash received from the sale of common stockGain on sale of investmentsLoss on sale of investmentsRetained earnings	- Select -
Changes in current operating assets and liabilities:	blank
Decrease in accounts payableDecrease in accounts receivableDecrease in inventoriesIncrease in accounts receivableLoss on sale of investments	- Select -
Decrease in accounts payableDecrease in accounts receivableDecrease in inventoriesGain on sale of investmentsIncrease in inventories	- Select -
Decrease in accounts payableDecrease in accounts receivableDecrease in accrued expensesDecrease in inventoriesIncrease in accounts payable	- Select -
Decrease in accounts payableDecrease in accrued expenses payableDecrease in dividends payableDepreciationIncrease in accrued expenses payable	- Select -
Net cash flows from operating activities	blank	$fill in the blank 15
Cash flows from (used for) investing activities:	blank
Cash received from gain on sale of investmentsCash received from issuing common stockCash received from loss on sale of investmentsCash received from sale of investmentsCash received from retained earnings	$- Select -
Cash paid for accounts payableCash paid for accumulated depreciationCash paid for common stockCash paid for depreciationCash paid for purchase of land	- Select -
Cash paid for accounts receivableCash paid for accrued expensesCash paid for accumulated depreciationCash paid for inventoriesCash paid for purchase of equipment	- Select -
Net cash flows used for investing activities	blank	fill in the blank 22
Cash flows from (used for) financing activities:	blank
Cash received from issuing common stockCash received from net incomeCash received from sale of equipmentCash received from sale of inventoriesCash received from sale of investments	$- Select -
Cash dividendsCash paid for inventoriesCash paid for purchase of equipmentCash paid for purchase of investmentsCash paid for purchase of land	- Select -
Net cash flows from financing activities	blank	fill in the blank 27
Net decrease in cashNet increase in cash	blank	$- Select -
Cash balance, January 1, 20Y9	blank	fill in the blank 30
Cash balance, December 31, 20Y9	blank	$fill in the blank 31

Check My Work

Cash		$53,320		$65,200
Accounts receivable (net)		81,920		87,890
Merchandise inventory		117,030		108,950
Prepaid expenses		4,770		3,300
Equipment		238,400		195,180
Accumulated depreciation-equipment		(61,980)		(47,870)
	Total assets	$433,460		$412,650
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)		$91,030		$86,240
Mortgage note payable		0		123,800
Common stock, $1 par		14,000		9,000
Excess of paid-in capital over par		191,000		116,000
Retained earnings		137,430		77,610
	Total liabilities and stockholders equity	$433,460		$412,650