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 FlowsFor the Year Ended December 31, 20Y9

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
  1. —indirect method

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

    Line Item Description December 31, 20Y9 December 31, 20Y8
    Assets    
    Cash $70,720 $47,940
    Accounts receivable (net) 207,230 188,190
    Inventories 298,520 289,850
    Investments 0 102,000
    Land 295,800 0
    Equipment 438,600 358,020
    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) 30,600 26,860
    Dividends payable 25,500 20,400
    Common stock, $1 par 202,000 102,000
    Paid-in capital in excess of par—common stock 354,000 204,000
    Retained earnings 393,960 354,280
    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:

    1. Equipment and land were acquired for cash.
    2. There were no disposals of equipment during the year.
    3. The investments were sold for $91,800 cash.
    4. The common stock was issued for cash.
    5. There was a $141,680 credit to Retained Earnings for net income.
    6. 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 FlowsFor the Year Ended December 31, 20Y9
    Line Item Description Amount Amount
    Cash flows from (used for) operating activities:    
     
    $- Select -  
    Adjustments to reconcile net income to net cash flows from (used for) operating activities:    
     
    - Select -  
     
    - Select -  
    Changes in current operating assets and liabilities:    
     
    - Select -  
     
    - Select -  
     
    - Select -  
     
    - Select -  
     
      $- Select -
    Cash flows from (used for) investing activities:    
     
    $- Select -  
     
    - Select - blank
     
    - Select -  
     
      - Select -
    Cash flows from (used for) financing activities:    
     
    $- Select -  
     
    - Select -  
     
      - Select -
     
      $- Select -
    Cash balance, January 1, 20Y9   Cash balance, January 1, 20Y9
    Cash balance, December 31, 20Y9   $Cash balance, December 31, 20Y9
 
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Cash Flow Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education