Statement of cash flows—indirect methodThe comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:Line Item DescriptionDecember 31, 20Y9December 31, 20Y8Assets Cash$226,130$208,420Accounts receivable (net)81,92074,850Inventories231,250221,630Investments085,860Land118,6100Equipment255,140195,940Accumulated depreciation—equipment(59,730)(52,840)Total assets$853,320$733,860Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)$154,450$144,570Accrued expenses payable (operating expenses)15,36019,080Dividends payable8,5306,600Common stock, $10 par46,08035,960Paid-in capital in excess of par—common stock173,22099,800Retained earnings455,680427,850Total liabilities and stockholders' equity$853,320$733,860Additional 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 $100,460 cash.The common stock was issued for cash.There was a $62,320 credit to Retained Earnings for net income.There was a $34,490 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, 20Y9Line Item DescriptionAmountAmountCash flows from (used for) operating activities:blank $- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities:blank - Select - - Select - Changes in current operating assets and liabilities:blank - Select - - Select - - Select - - Select - blank$- Select -Cash flows from (used for) investing activities:blank $- Select - - Select - - Select - blank- Select -Cash flows from (used for) financing activities:blank $- Select - - Select - blank- Select - blank$- Select -Cash balance, January 1, 20Y9blankCash balance, January 1, 20Y9Cash balance, December 31, 20Y9

A statement which shows inflow and outflow of cash under three different activities, called as cash…

Answered: Statement of cash flows—indirect method…

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:

Line Item Description	December 31, 20Y9	December 31, 20Y8
Assets
Cash	$226,130	$208,420
Accounts receivable (net)	81,920	74,850
Inventories	231,250	221,630
Investments	0	85,860
Land	118,610	0
Equipment	255,140	195,940
Accumulated depreciation—equipment	(59,730)	(52,840)
Total assets	$853,320	$733,860
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$154,450	$144,570
Accrued expenses payable (operating expenses)	15,360	19,080
Dividends payable	8,530	6,600
Common stock, $10 par	46,080	35,960
Paid-in capital in excess of par—common stock	173,220	99,800
Retained earnings	455,680	427,850
Total liabilities and stockholders' equity	$853,320	$733,860

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 $100,460 cash.
The common stock was issued for cash.
There was a $62,320 credit to Retained Earnings for net income.
There was a $34,490 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:	blank
	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:	blank
	- Select -
	- Select -
Changes in current operating assets and liabilities:	blank
	- Select -
	- Select -
	- Select -
	- Select -
	blank	$- Select -
Cash flows from (used for) investing activities:	blank
	$- Select -
	- Select -
	- Select -
	blank	- Select -
Cash flows from (used for) financing activities:	blank
	$- Select -
	- Select -
	blank	- Select -
	blank	$- Select -
Cash balance, January 1, 20Y9	blank	Cash balance, January 1, 20Y9
Cash balance, December 31, 20Y9

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