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 $269,900 $249,630 Accounts receivable (net) 97,780 89,650 Inventories 276,020 265,460 Investments 0 102,840 Land 141,570 0 Equipment 304,530 234,680 Accumulated depreciation—equipment (71,300) (63,290) Total assets $1,018,500 $878,970 Liabilities and Stockholders' Equity Accounts payable $184,350 $173,160 Accrued expenses payable 18,330 22,850 Dividends payable 10,190 7,910 Common stock, $10 par 55,000 43,070 Paid-in capital: Excess of issue price over par-common stock 206,760 119,540 Retained earnings 543,870 512,440 Total liabilities and stockholders’ equity $1,018,500 $878,970 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 $92,560 cash. The common stock was issued for cash. There was a $72,740 credit to Retained Earnings for net income. There was a $41,310 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	$269,900		$249,630
Accounts receivable (net)	97,780		89,650
Inventories	276,020		265,460
Investments	0		102,840
Land	141,570		0
Equipment	304,530		234,680
Accumulated depreciation—equipment	(71,300)		(63,290)
	Total assets	$1,018,500		$878,970

Liabilities and Stockholders' Equity
Accounts payable	$184,350		$173,160
Accrued expenses payable	18,330		22,850
Dividends payable	10,190		7,910
Common stock, $10 par	55,000		43,070
Paid-in capital: Excess of issue price over par-common stock	206,760		119,540
Retained earnings	543,870		512,440
	Total liabilities and stockholders’ equity	$1,018,500		$878,970

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 $92,560 cash.
The common stock was issued for cash.
There was a $72,740 credit to Retained Earnings for net income.
There was a $41,310 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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