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 $290,780 $268,930 Accounts receivable (net) 105,340 96,590 Inventories 297,360 285,980 Investments 0 110,790 Land 152,520 0 Equipment 328,080 252,830 Accumulated depreciation—equipment (76,810) (68,180) Total assets $1,097,270 $946,940 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $198,610 $186,550 Accrued expenses payable (operating expenses) 19,750 24,620 Dividends payable 10,970 8,520 Common stock, $10 par 59,250 46,400 Paid-in capital in excess of par—common stock 222,750 128,780 Retained earnings 585,940 552,070 Total liabilities and stockholders’ equity $1,097,270 $946,940 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 $129,620 cash. The common stock was issued for cash. There was a $78,380 credit to Retained Earnings for net income. There was a $44,510 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	$290,780		$268,930
Accounts receivable (net)	105,340		96,590
Inventories	297,360		285,980
Investments	0		110,790
Land	152,520		0
Equipment	328,080		252,830
Accumulated depreciation—equipment	(76,810)		(68,180)
Total assets	$1,097,270		$946,940

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$198,610		$186,550
Accrued expenses payable (operating expenses)	19,750		24,620
Dividends payable	10,970		8,520
Common stock, $10 par	59,250		46,400
Paid-in capital in excess of par—common stock	222,750		128,780
Retained earnings	585,940		552,070
Total liabilities and stockholders’ equity	$1,097,270		$946,940

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 $129,620 cash.
The common stock was issued for cash.
There was a $78,380 credit to Retained Earnings for net income.
There was a $44,510 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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