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 $244,370 $228,630 Accounts receivable (net) 88,530 82,120 Inventories 249,900 243,120 Investments 0 94,190 Land 128,180 0 Equipment 275,730 214,950 Accumulated depreciation—equipment (64,550) (57,960) Total assets $922,160 $805,050 Liabilities and Stockholders' Equity Accounts payable $166,910 $158,590 Accrued expenses payable 16,600 20,930 Dividends payable 9,220 7,250 Common stock, $10 par 49,800 39,450 Paid-in capital: Excess of issue price over par-common stock 187,200 109,490 Retained earnings 492,430 469,340 Total liabilities and stockholders’ equity $922,160 $805,050 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 $84,770 cash. The common stock was issued for cash. There was a $60,930 credit to Retained Earnings for net income. There was a $37,840 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. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31, 20Y9 Cash flows from operating activities: $ Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities $ Cash flows from (used for) investing activities: $ Net cash flow used for investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities $ Cash at the beginning of the year Cash at the end of the year $

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 $244,370 $228,630 Accounts receivable (net) 88,530 82,120 Inventories 249,900 243,120 Investments 0 94,190 Land 128,180 0 Equipment 275,730 214,950 Accumulated depreciation—equipment (64,550) (57,960) Total assets $922,160 $805,050 Liabilities and Stockholders' Equity Accounts payable $166,910 $158,590 Accrued expenses payable 16,600 20,930 Dividends payable 9,220 7,250 Common stock, $10 par 49,800 39,450 Paid-in capital: Excess of issue price over par-common stock 187,200 109,490 Retained earnings 492,430 469,340 Total liabilities and stockholders’ equity $922,160 $805,050 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 $84,770 cash. The common stock was issued for cash. There was a $60,930 credit to Retained Earnings for net income. There was a $37,840 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. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31, 20Y9 Cash flows from operating activities: $ Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities $ Cash flows from (used for) investing activities: $ Net cash flow used for investing activities Cash flows from (used for) financing activities: Net cash flow from financing activities $ Cash at the beginning of the year Cash at the end of the year $

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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Question

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	$244,370		$228,630
Accounts receivable (net)	88,530		82,120
Inventories	249,900		243,120
Investments	0		94,190
Land	128,180		0
Equipment	275,730		214,950
Accumulated depreciation—equipment	(64,550)		(57,960)
	Total assets	$922,160		$805,050

Liabilities and Stockholders' Equity
Accounts payable	$166,910		$158,590
Accrued expenses payable	16,600		20,930
Dividends payable	9,220		7,250
Common stock, $10 par	49,800		39,450
Paid-in capital: Excess of issue price over par-common stock	187,200		109,490
Retained earnings	492,430		469,340
	Total liabilities and stockholders’ equity	$922,160		$805,050

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 $84,770 cash.
The common stock was issued for cash.
There was a $60,930 credit to Retained Earnings for net income.
There was a $37,840 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.

Merrick Equipment Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y9
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:


Changes in current operating assets and liabilities:




Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$


Net cash flow used for investing activities
Cash flows from (used for) financing activities:


Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

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