Financial & Managerial Accounting
Financial & Managerial Accounting
14th Edition
ISBN: 9781337515498
Author: WARREN
Publisher: Cengage
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Chapter 13, Problem 13.5BPR

Statement of cash flows—direct method applied to PR 13–1B

The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, is:

  Dec. 31, 20Y9 Dec. 31, 20Y8
Assets      
Cash $ 70,720 $ 47,940
Accounts receivable (net) 207,230   188,190
Inventories 298,520   289,850
Investments 0   102,000
Land 295,800   0
Equipment 438,600   358,020
Accumulated depreciation—equipment (99,110)   (84,320)
Total assets $ 1,211,760 $ 901,680
Liabilities and Stockholders' Equity      
Accounts payable (merchandise creditors).................. $ 205,700 $ 194,140
Accrued expenses payable (operating expenses) 30,600   26,860
Dividends payable 25,500   20,400
Common stock. $1 par 202,000   102,000
Paid-in capital: Excess of issue price over par—common stock 354,000   204,000
Retained earnings 393,960   354,280
Total liabilities and stockholders' equity $ 1,211,760 $ 901,680
The income statement for the year ended December 31,20Y9, is as fallow s:
Sales   $2,023,898
Cost of goods sold   1,245,476
Gross profit   $ 778,422
Operating expenses:    
Depreciation expense $ 14,790  
Other operating expenses 517,299  
Total operating expenses   532,089
Operating income   $ 246,333
Other expenses:    
Loss on sale of investments   (10,200)
Income before income tax   $ 236,133
Income tax expense   94,453
Net income   $ 141,680

Additional data obtained from an examination of the- accounts in the ledger for 20Y9 are as follows:

  • A. Equipment and land were acquired for cash.
  • B. There were no disposals of equipment during the year.
  • C. The investments were sold for $91,800 cash.
  • D. The common stock was issued for cash.
  • E. There was a $ 102,000 debit to Retained Earnings for cash dividends declared.

Instructions

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.

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Chapter 13 Solutions

Financial & Managerial Accounting

Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Prob. 13.2BECh. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Prob. 13.7BECh. 13 - Prob. 13.8BECh. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Prob. 13.5EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Prob. 13.14EXCh. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Cash flows from operating activities direct method...Ch. 13 - Prob. 13.22EXCh. 13 - Prob. 13.1APRCh. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows indirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows direct method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 1ADMCh. 13 - Prob. 2ADMCh. 13 - Prob. 3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Prob. 13.1TIFCh. 13 - Prob. 13.3TIF
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