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 $268,370 $252,240 Accounts receivable (net) 97,220 90,590 Inventories 274,450 268,230 Investments 0 103,910 Land 140,770 0 Equipment 302,800 237,140 Accumulated depreciation—equipment (70,890) (63,950) Total assets $1,012,720 $888,160 Liabilities and Stockholders' Equity Accounts payable $183,300 $174,970 Accrued expenses payable 18,230 23,090 Dividends payable 10,130 7,990 Common stock, $10 par 54,690 43,520 Paid-in capital: Excess of issue price over par-common stock 205,580 120,790 Retained earnings 540,790 517,800 Total liabilities and stockholders’ equity $1,012,720 $888,160 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 $93,520 cash. The common stock was issued for cash. There was a $64,730 credit to Retained Earnings for net income. There was a $41,740 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	$268,370		$252,240
Accounts receivable (net)	97,220		90,590
Inventories	274,450		268,230
Investments	0		103,910
Land	140,770		0
Equipment	302,800		237,140
Accumulated depreciation—equipment	(70,890)		(63,950)
	Total assets	$1,012,720		$888,160

Liabilities and Stockholders' Equity
Accounts payable	$183,300		$174,970
Accrued expenses payable	18,230		23,090
Dividends payable	10,130		7,990
Common stock, $10 par	54,690		43,520
Paid-in capital: Excess of issue price over par-common stock	205,580		120,790
Retained earnings	540,790		517,800
	Total liabilities and stockholders’ equity	$1,012,720		$888,160

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 $93,520 cash.
The common stock was issued for cash.
There was a $64,730 credit to Retained Earnings for net income.
There was a $41,740 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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