The following three accounts appear in the general ledger of
Herrick Corp. during 2020.
Equipment |
||||||||
Date |
Debit |
Credit |
Balance |
|||||
Jan. 1 | Balance | 159,600 | ||||||
July 31 | Purchase of equipment | 71,200 | 230,800 | |||||
Sept. 2 | Cost of equipment constructed | 52,500 | 283,300 | |||||
Nov. 10 | Cost of equipment sold | 48,300 | 235,000 | |||||
Accumulated Depreciation—Equipment |
||||||||
Date |
Debit |
Credit |
Balance |
|||||
Jan. 1 | Balance | 70,500 | ||||||
Nov. 10 | Accumulated depreciation on equipment sold | 30,200 | 40,300 | |||||
Dec. 31 | Depreciation for year | 23,800 | 64,100 | |||||
Retained Earnings |
||||||||
Date |
Debit |
Credit |
Balance |
|||||
Jan. 1 | Balance | 104,700 | ||||||
Aug. 23 | Dividends (cash) | 16,600 | 88,100 | |||||
Dec. 31 | Net income | 65,400 | 153,500 |
From the postings in the accounts, indicate how the information is
reported on a statement of cash flows using the indirect method.
The loss on disposal of plant assets was $5,900. (Hint:
Cost of equipment constructed is reported in the investing
activities section as a decrease in cash of $52,500.)
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
HERRICK CORP Partial Statement of Cash Flows December 31, 2020For the Month Ended December 31, 2020For the Year Ended December 31, 2020 |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Loss on Disposal of Plant Assets Purchase of Equipment Sale of Equipment Decrease in Accounts Payable Construction of Equipment Net Income Increase in Accounts Receivable Depreciation Expense Payment of Cash Dividends |
$ | |
Adjustments to reconcile net income to |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Increase in Accounts Receivable Sale of Equipment Loss on Disposal of Plant Assets Purchase of Equipment Construction of Equipment Decrease in Accounts Payable Payment of Cash Dividends Net Income Depreciation Expense |
$ | |
Sale of Equipment Loss on Disposal of Plant Assets Purchase of Equipment Net Income Construction of Equipment Decrease in Accounts Payable Payment of Cash Dividends Increase in Accounts Receivable Depreciation Expense |
||
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Loss on Disposal of Plant Assets Sale of Equipment Decrease in Accounts Payable Construction of Equipment Payment of Cash Dividends Net Income Increase in Accounts Receivable Depreciation Expense Purchase of Equipment |
||
Loss on Disposal of Plant Assets Construction of Equipment Increase in Accounts Receivable Sale of Equipment Depreciation Expense Purchase of Equipment Decrease in Accounts Payable Net Income Payment of Cash Dividends |
||
Net Income Depreciation Expense Construction of Equipment Loss on Disposal of Plant Assets Decrease in Accounts Payable Purchase of Equipment Sale of Equipment Payment of Cash Dividends Increase in Accounts Receivable |
||
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash Used by Financing Activities Net Cash Used by Investing Activities Net Cash Used by Operating Activities Net Decrease in Cash Net Increase in Cash |
||
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash |
||
Net Income Depreciation Expense Loss on Disposal of Plant Assets Sale of Equipment Purchase of Equipment Construction of Equipment Payment of Cash Dividends Increase in Accounts Receivable Decrease in Accounts Payable |
HERRICK CORP. | ||
Partial Statement of Cash Flows | ||
For the Year Ended December 31, 2020 | ||
Cash Flow from Operating Activites: | ||
Net Income | $65,400 | |
Adjustments to reconcile net income to | ||
Net cash provided by Operating Activites | ||
Depreciation expense | $23,800 | |
Loss on disposal of equipment | $5,900 | |
$29,700 | ||
Net Cash provided by Operating Activites [$65,400 + $29,700] | $95,100 | |
Cash Flows from Investing Activities: | ||
Sale of Equipment [Refer working note] | $12,200 | |
Construction of Equipment | ($52,500) | |
Purchase of Equipment | ($71,200) | |
Net Cash Used by Investing Activites [$12,200 - $52,500 - $71,200] | ($111,500) | |
Cash Flow from Financing Activities: | ||
Payment of Cash dividends | ($16,600) |
.
.
The following three accounts appear in the general ledger of Herrick Corp. during 2020. Equipment Date...
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