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 $292,750 $272,320 Accounts receivable (net) 106,050 97,810 Inventories 299,380 289,590 Investments 0 112,190 Land 153,550 0 Equipment 330,310 256,020 Accumulated depreciation—equipment (77,330) (69,040) Total assets $1,104,710 $958,890 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $199,950 $188,900 Accrued expenses payable (operating expenses) 19,880 24,930 Dividends payable 11,050 8,630 Common stock, $10 par 59,650 46,990 Paid-in capital in excess of par—common stock 224,260 130,410 Retained earnings 589,920 559,030 Total liabilities and stockholders’ equity $1,104,710 $958,890 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 $131,260 cash. The common stock was issued for cash. There was a $75,960 credit to Retained Earnings for net income. There was a $45,070 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

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	$292,750		$272,320
Accounts receivable (net)	106,050		97,810
Inventories	299,380		289,590
Investments	0		112,190
Land	153,550		0
Equipment	330,310		256,020
Accumulated depreciation—equipment	(77,330)		(69,040)
Total assets	$1,104,710		$958,890

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$199,950		$188,900
Accrued expenses payable (operating expenses)	19,880		24,930
Dividends payable	11,050		8,630
Common stock, $10 par	59,650		46,990
Paid-in capital in excess of par—common stock	224,260		130,410
Retained earnings	589,920		559,030
Total liabilities and stockholders’ equity	$1,104,710		$958,890

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 $131,260 cash.
The common stock was issued for cash.
There was a $75,960 credit to Retained Earnings for net income.
There was a $45,070 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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