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 $230,940 $216,560 Accounts receivable (net) 83,660 77,780 Inventories 236,170 230,280 Investments 0 89,220 Land 121,130 0 Equipment 260,570 203,600 Accumulated depreciation—equipment (61,000) (54,900) Total assets $871,470 $762,540 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $157,740 $150,220 Accrued expenses payable (operating expenses) 15,690 19,830 Dividends payable 8,710 6,860 Common stock, $10 par 47,060 37,360 Paid-in capital in excess of par—common stock 176,910 103,710 Retained earnings 465,360 444,560 Total liabilities and stockholders’ equity $871,470 $762,540 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 $104,390 cash. The common stock was issued for cash. There was a $56,640 credit to Retained Earnings for net income. There was a $35,840 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

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	$230,940		$216,560
Accounts receivable (net)	83,660		77,780
Inventories	236,170		230,280
Investments	0		89,220
Land	121,130		0
Equipment	260,570		203,600
Accumulated depreciation—equipment	(61,000)		(54,900)
Total assets	$871,470		$762,540

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$157,740		$150,220
Accrued expenses payable (operating expenses)	15,690		19,830
Dividends payable	8,710		6,860
Common stock, $10 par	47,060		37,360
Paid-in capital in excess of par—common stock	176,910		103,710
Retained earnings	465,360		444,560
Total liabilities and stockholders’ equity	$871,470		$762,540

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 $104,390 cash.
The common stock was issued for cash.
There was a $56,640 credit to Retained Earnings for net income.
There was a $35,840 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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