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Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Increase in accrued expenses payable Net cash flow from operating activities Cash flows from investing activities: Cash received from sale of investments Less cash paid for purchase of land Less cash paid for purchase of equipment Net cash flow used for investing activities MERRICK EQUIPMENT CO. Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from financing activities: Cash received from sale of common stock Less cash paid for dividends Net cash flow provided by financing activities Optional: Increase in cash Cash at the beginning of the year Cash at the end of the year Cash Accounts receivable (net) Inventories Investments Operating activities: Net income Land Equipment Accum. depr. - equipment Accounts payable Accrued expenses payable Dividends payable Common stock, $1 par Paid-in capital in excess of par Retained earnings Totals Depreciation Loss on sale of investments Increase in accounts receivable Increase in inventories Purchase of equipment Purchase of land Sale of investments Increase in accounts payable Increase in accrued expenses payable Investing activities: Financing activities: Net increase in cash Totals Declaration of cash dividends Sale of common stock Increase in dividends payable MERRICK EQUIPMENT CO. Spreadsheet (Work Sheet) for Statement of Cash Flows For the Year Ended December 31, 2014 Balance, Dec. 31, 2013 47,940 188,190 289,850 102,000 $141,680 358,020 (84,320) (194,140) (26,860) (20,400) (102,000) (204,000) (354,280) 14,790 10,200 (19,040) (8,670) 11,560 3,740 $ 91,800 (295,800) (80,580) $250,000 (96,900) $154,260 Debit (284,580) Transactions 153,100 $ 22,780 47,940 $ 70,720 Credit Balance, Dec. 31, 2014 70,720 207,230 298,520 295,800 438,600 (99,110) (205,700) (30,600) (25,500) (202,000) (354,000) (393,960)
Transcribed Image Text: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 Increase in accrued expenses payable Net cash flow from operating activities Cash flows from investing activities: Cash received from sale of investments Less cash paid for purchase of land Less cash paid for purchase of equipment Net cash flow used for investing activities MERRICK EQUIPMENT CO. Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from financing activities: Cash received from sale of common stock Less cash paid for dividends Net cash flow provided by financing activities Optional: Increase in cash Cash at the beginning of the year Cash at the end of the year Cash Accounts receivable (net) Inventories Investments Operating activities: Net income Land Equipment Accum. depr. - equipment Accounts payable Accrued expenses payable Dividends payable Common stock, $1 par Paid-in capital in excess of par Retained earnings Totals Depreciation Loss on sale of investments Increase in accounts receivable Increase in inventories Purchase of equipment Purchase of land Sale of investments Increase in accounts payable Increase in accrued expenses payable Investing activities: Financing activities: Net increase in cash Totals Declaration of cash dividends Sale of common stock Increase in dividends payable MERRICK EQUIPMENT CO. Spreadsheet (Work Sheet) for Statement of Cash Flows For the Year Ended December 31, 2014 Balance, Dec. 31, 2013 47,940 188,190 289,850 102,000 $141,680 358,020 (84,320) (194,140) (26,860) (20,400) (102,000) (204,000) (354,280) 14,790 10,200 (19,040) (8,670) 11,560 3,740 $ 91,800 (295,800) (80,580) $250,000 (96,900) $154,260 Debit (284,580) Transactions 153,100 $ 22,780 47,940 $ 70,720 Credit Balance, Dec. 31, 2014 70,720 207,230 298,520 295,800 438,600 (99,110) (205,700) (30,600) (25,500) (202,000) (354,000) (393,960)
Problems Series B Net cash flow from operating activities, $154,260 SPREADSHEET Net cash flow from operating activities, $561,400 SPREADSHEET Cash Accounts receivable (net). Inventories Investments PR 16-18 Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Merrick Equipment Co. for December 31, 2014 and 2013, is as follows: Land ...... Equipment.... Accumulated depreciation-equipment.. Assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) ... Accrued expenses payable (operating expenses) Dividends payable.... Common stock, $1 par... Paid-in capital: Excess of issue price over par-common stock.... Retained earnings.. Cash Accounts receivable (net) Inventories .. Chapter 16 Statement of Cash Flows Prepaid expenses Land ..... Assets Buildings... Accumulated depreciation-buildings. Dec. 31, 2014 $ 70,720 207,230 298,520 0 295,800 438,600 (99,110) $1,211,760 Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows: Machinery and equipment...... Accumulated depreciation-machinery and equipment... Patents.. CON $ 205,700 30,600 25,500 202,000 354,000 393,960 $1,211,760 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. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. PR 16-2B Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Harris Industries Inc. at December 31, 2014 and 2013, is as follows: Dec. 31, 2013 $ 47,940 188,190 289,850 102,000 0 358,020 (84,320) $901,680 Dec. 31, 2014 $194,140 26,860 20,400 102,000 204,000 354,280 $901,680 $ 443,240 665,280 887,880 31,640 302,400 1,713,600 (466,200) 781,200 (214,200) 106,960 $4,251,800 771 Dec. 31, 2013 $360,920 592,200 1,022,560 25,200 302,400 1,134,000 (414,540) 781,200 (191,520) 112,000 $3,724,420 (Continued) I
Transcribed Image Text:Problems Series B Net cash flow from operating activities, $154,260 SPREADSHEET Net cash flow from operating activities, $561,400 SPREADSHEET Cash Accounts receivable (net). Inventories Investments PR 16-18 Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Merrick Equipment Co. for December 31, 2014 and 2013, is as follows: Land ...... Equipment.... Accumulated depreciation-equipment.. Assets Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) ... Accrued expenses payable (operating expenses) Dividends payable.... Common stock, $1 par... Paid-in capital: Excess of issue price over par-common stock.... Retained earnings.. Cash Accounts receivable (net) Inventories .. Chapter 16 Statement of Cash Flows Prepaid expenses Land ..... Assets Buildings... Accumulated depreciation-buildings. Dec. 31, 2014 $ 70,720 207,230 298,520 0 295,800 438,600 (99,110) $1,211,760 Additional data obtained from an examination of the accounts in the ledger for 2014 are as follows: Machinery and equipment...... Accumulated depreciation-machinery and equipment... Patents.. CON $ 205,700 30,600 25,500 202,000 354,000 393,960 $1,211,760 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. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. PR 16-2B Statement of cash flows-indirect method OBJ. 2 The comparative balance sheet of Harris Industries Inc. at December 31, 2014 and 2013, is as follows: Dec. 31, 2013 $ 47,940 188,190 289,850 102,000 0 358,020 (84,320) $901,680 Dec. 31, 2014 $194,140 26,860 20,400 102,000 204,000 354,280 $901,680 $ 443,240 665,280 887,880 31,640 302,400 1,713,600 (466,200) 781,200 (214,200) 106,960 $4,251,800 771 Dec. 31, 2013 $360,920 592,200 1,022,560 25,200 302,400 1,134,000 (414,540) 781,200 (191,520) 112,000 $3,724,420 (Continued) I
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