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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 (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Cash paid for purchase of land Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 20Y9 Cash balance, December 31, 20V9

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 (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Cash paid for purchase of land Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 20Y9 Cash balance, December 31, 20V9

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Cash paid for purchase of land - Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 20V9 Cash balance, December 31, 20V9
Transcribed Image Text: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 (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Cash paid for purchase of land - Cash paid for purchase of equipment Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 20V9 Cash balance, December 31, 20V9
Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 20V9 and 20Y8, is as follows: Dec. 31, 20Y9 Dec. 31, 20Y8 Assets Cash $251,800 $236,390 Accounts receivable (net) 91,220 84,900 Inventories 257,490 251,370 Investments 97,390 Land 132,080 Equipment 284,100 222,240 Accumulated depreciation-equipment (66,510) (59,930) Total assets $950,180 $832,360 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $171,980 $163,970 Accrued expenses payable (operating expenses) 17,100 21,640 Dividends payable 9,500 7,490 Common stock, $10 par 51,310 40,790 Paid-in capital in excess of par-common stock 192,890 113,200 Retained earnings 507,400 485,270 Total liabilities and stockholders' equity $950,180 $832,360 Additional data obtained from an examination of the accounts in the ledger for 20Y9 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 $113,950 cash. d. The common stock was issued for cash. e. There was a $61,250 credit to Retained Earnings for net income. f. There was a $39,120 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.
Transcribed Image Text:Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 20V9 and 20Y8, is as follows: Dec. 31, 20Y9 Dec. 31, 20Y8 Assets Cash $251,800 $236,390 Accounts receivable (net) 91,220 84,900 Inventories 257,490 251,370 Investments 97,390 Land 132,080 Equipment 284,100 222,240 Accumulated depreciation-equipment (66,510) (59,930) Total assets $950,180 $832,360 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $171,980 $163,970 Accrued expenses payable (operating expenses) 17,100 21,640 Dividends payable 9,500 7,490 Common stock, $10 par 51,310 40,790 Paid-in capital in excess of par-common stock 192,890 113,200 Retained earnings 507,400 485,270 Total liabilities and stockholders' equity $950,180 $832,360 Additional data obtained from an examination of the accounts in the ledger for 20Y9 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 $113,950 cash. d. The common stock was issued for cash. e. There was a $61,250 credit to Retained Earnings for net income. f. There was a $39,120 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.
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