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 $303,530 $282,030 Accounts receivable (net) 109,960 101,290 Inventories 310,400 299,900 Investments 0 116,190 Land 159,210 0 Equipment 342,470 265,140 Accumulated depreciation—equipment (80,180) (71,500) Total assets $1,145,390 $993,050 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $207,320 $195,630 Accrued expenses payable (operating expenses) 20,620 25,820 Dividends payable 11,450 8,940 Common stock, $10 par 61,850 48,660 Paid-in capital in excess of par—common stock 232,510 135,050 Retained earnings 611,640 578,950 Total liabilities and stockholders’ equity $1,145,390 $993,050 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 $135,940 cash. The common stock was issued for cash. There was a $79,360 credit to Retained Earnings for net income. There was a $46,670 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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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	$303,530		$282,030
Accounts receivable (net)	109,960		101,290
Inventories	310,400		299,900
Investments	0		116,190
Land	159,210		0
Equipment	342,470		265,140
Accumulated depreciation—equipment	(80,180)		(71,500)
Total assets	$1,145,390		$993,050

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$207,320		$195,630
Accrued expenses payable (operating expenses)	20,620		25,820
Dividends payable	11,450		8,940
Common stock, $10 par	61,850		48,660
Paid-in capital in excess of par—common stock	232,510		135,050
Retained earnings	611,640		578,950
Total liabilities and stockholders’ equity	$1,145,390		$993,050

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 $135,940 cash.
The common stock was issued for cash.
There was a $79,360 credit to Retained Earnings for net income.
There was a $46,670 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.