Statement of Cash Flows—Indirect Method 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 $298,870 $277,700 Accounts receivable (net) 108,270 99,740 Inventories 305,640 295,290 Investments 0 114,400 Land 156,760 0 Equipment 337,210 261,070 Accumulated depreciation—equipment (78,950) (70,400) Total assets $1,127,800 $977,800 Liabilities and Stockholders' Equity Accounts payable $204,130 $192,630 Accrued expenses payable 20,300 25,420 Dividends payable 11,280 8,800 Common stock, $10 par 60,900 47,910 Paid-in capital: Excess of issue price over par-common stock 228,940 132,980 Retained earnings 602,250 570,060 Total liabilities and stockholders’ equity $1,127,800 $977,800 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 $102,960 cash. The common stock was issued for cash. There was a $78,150 credit to Retained Earnings for net income. There was a $45,960 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.

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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Statement of Cash Flows—Indirect Method

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	$298,870		$277,700
Accounts receivable (net)	108,270		99,740
Inventories	305,640		295,290
Investments	0		114,400
Land	156,760		0
Equipment	337,210		261,070
Accumulated depreciation—equipment	(78,950)		(70,400)
	Total assets	$1,127,800		$977,800

Liabilities and Stockholders' Equity
Accounts payable	$204,130		$192,630
Accrued expenses payable	20,300		25,420
Dividends payable	11,280		8,800
Common stock, $10 par	60,900		47,910
Paid-in capital: Excess of issue price over par-common stock	228,940		132,980
Retained earnings	602,250		570,060
	Total liabilities and stockholders’ equity	$1,127,800		$977,800

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 $102,960 cash.
The common stock was issued for cash.
There was a $78,150 credit to Retained Earnings for net income.
There was a $45,960 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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