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 $230,690 $215,090 Accounts receivable (net) 83,570 77,250 Inventories 235,920 228,730 Investments 0 88,610 Land 121,010 0 Equipment 260,290 202,220 Accumulated depreciation—equipment (60,940) (54,530) Total assets $870,540 $757,370 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $157,570 $149,200 Accrued expenses payable (operating expenses) 15,670 19,690 Dividends payable 8,710 6,820 Common stock, $10 par 47,010 37,110 Paid-in capital in excess of par—common stock 176,720 103,000 Retained earnings 464,860 441,550 Total liabilities and stockholders' equity $870,540 $757,370 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 $103,670 cash. The common stock was issued for cash. There was a $58,910 credit to Retained Earnings for net income. There was a $35,600 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.

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:

Line Item Description	December 31, 20Y9	December 31, 20Y8
Assets
Cash	$230,690	$215,090
Accounts receivable (net)	83,570	77,250
Inventories	235,920	228,730
Investments	0	88,610
Land	121,010	0
Equipment	260,290	202,220
Accumulated depreciation—equipment	(60,940)	(54,530)
Total assets	$870,540	$757,370
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$157,570	$149,200
Accrued expenses payable (operating expenses)	15,670	19,690
Dividends payable	8,710	6,820
Common stock, $10 par	47,010	37,110
Paid-in capital in excess of par—common stock	176,720	103,000
Retained earnings	464,860	441,550
Total liabilities and stockholders' equity	$870,540	$757,370

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 $103,670 cash.
The common stock was issued for cash.
There was a $58,910 credit to Retained Earnings for net income.
There was a $35,600 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.

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