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 $271,620 $255,000 Accounts receivable (net) 98,400 91,580 Inventories 277,770 271,170 Investments 0 105,050 Land 142,470 0 Equipment 306,470 239,730 Accumulated depreciation—equipment (71,750) (64,650) Total assets $1,024,980 $897,880 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $185,520 $176,880 Accrued expenses payable (operating expenses) 18,450 23,340 Dividends payable 10,250 8,080 Common stock, $10 par 55,350 44,000 Paid-in capital in excess of par—common stock 208,070 122,110 Retained earnings 547,340 523,470 Total liabilities and stockholders’ equity $1,024,980 $897,880 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 $122,910 cash. The common stock was issued for cash. There was a $66,070 credit to Retained Earnings for net income. There was a $42,200 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 (used for) operating activities: $fill in the blank 2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flow from operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flow used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 Net cash flow from financing activities fill in the blank 27 $fill in the blank 29 Cash balance, January 1, 20Y9 fill in the blank 30 Cash balance, December 31, 20Y9 $fill in the blank 31

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 $271,620 $255,000 Accounts receivable (net) 98,400 91,580 Inventories 277,770 271,170 Investments 0 105,050 Land 142,470 0 Equipment 306,470 239,730 Accumulated depreciation—equipment (71,750) (64,650) Total assets $1,024,980 $897,880 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $185,520 $176,880 Accrued expenses payable (operating expenses) 18,450 23,340 Dividends payable 10,250 8,080 Common stock, $10 par 55,350 44,000 Paid-in capital in excess of par—common stock 208,070 122,110 Retained earnings 547,340 523,470 Total liabilities and stockholders’ equity $1,024,980 $897,880 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 $122,910 cash. The common stock was issued for cash. There was a $66,070 credit to Retained Earnings for net income. There was a $42,200 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 (used for) operating activities: $fill in the blank 2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flow from operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flow used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 Net cash flow from financing activities fill in the blank 27 $fill in the blank 29 Cash balance, January 1, 20Y9 fill in the blank 30 Cash balance, December 31, 20Y9 $fill in the blank 31

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	$271,620		$255,000
Accounts receivable (net)	98,400		91,580
Inventories	277,770		271,170
Investments	0		105,050
Land	142,470		0
Equipment	306,470		239,730
Accumulated depreciation—equipment	(71,750)		(64,650)
Total assets	$1,024,980		$897,880

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$185,520		$176,880
Accrued expenses payable (operating expenses)	18,450		23,340
Dividends payable	10,250		8,080
Common stock, $10 par	55,350		44,000
Paid-in capital in excess of par—common stock	208,070		122,110
Retained earnings	547,340		523,470
Total liabilities and stockholders’ equity	$1,024,980		$897,880

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 $122,910 cash.
The common stock was issued for cash.
There was a $66,070 credit to Retained Earnings for net income.
There was a $42,200 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 (used for) operating activities:
	$fill in the blank 2
Adjustments to reconcile net income to net cash flow from operating activities:
	fill in the blank 4
	fill in the blank 6
Changes in current operating assets and liabilities:
	fill in the blank 8
	fill in the blank 10
	fill in the blank 12
	fill in the blank 14
Net cash flow from operating activities		$fill in the blank 15
Cash flows from (used for) investing activities:
	$fill in the blank 17
	fill in the blank 19
	fill in the blank 21
Net cash flow used for investing activities		fill in the blank 22
Cash flows from (used for) financing activities:
	$fill in the blank 24
	fill in the blank 26
Net cash flow from financing activities		fill in the blank 27
		$fill in the blank 29
Cash balance, January 1, 20Y9		fill in the blank 30
Cash balance, December 31, 20Y9		$fill in the blank 31

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