Statement of Cash Flows—Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31,...

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Statement of Cash Flows—Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31,...

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		$269,720	$253,210
Accounts receivable (net)		97,710	90,940
Inventories		275,830	269,260
Investments		0	104,320
Land		141,470	0
Equipment		304,320	238,050
Accumulated depreciation—equipment		(71,250)	(64,190)
	Total assets	$1,017,800	$891,590

Liabilities and Stockholders' Equity
Accounts payable		$184,220	$175,640
Accrued expenses payable		18,320	23,180
Dividends payable		10,180	8,020
Common stock, $10 par		54,960	43,690
Paid-in capital: Excess of issue price over par-common stock		206,610	121,260
Retained earnings		543,510	519,800
	Total liabilities and stockholders’ equity	$1,017,800	$891,590

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 $93,890 cash.
The common stock was issued for cash.
There was a $65,610 credit to Retained Earnings for net income.
There was a $41,900 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.

Merrick Equipment Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y9
Cash flows from operating activities:
	$
Adjustments to reconcile net income to net cash flow from operating activities:


Changes in current operating assets and liabilities:




Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$


Net cash flow used for investing activities
Cash flows from (used for) financing activities:


Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

business accounting

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Answer 1

Answer #1

Merrick Equipment Co.
Statement of Cash Flow
For the Year Ended Dec 31, 20Y9

Cash flows from operating activities:
Net Income	$65,610
Adjustments to reconcile net loss to net cash flow from operating activities:
Depreciation expense	$7,060
Loss on sale of investment	$10,430
Changes in current operating assets and liabilities:
Increase in accounts receivable	-$6,770
Increase in inventory	-$6,570
Increase in accounts payable	$8,580
Decrease in accrued expenses payable	-$4,860
Net Cash provided by operating activities		$73,480
Cash Flow from Investing Activities
Proceeds from the sale of investments	$93,890
Purchase of land	-$141,470
Purchase of equipment	-$66,270
Net cash used in investing activities		-$113,850
Cash Flow from Financing Activities
Proceeds from common stock issued	$96,620
Dividends Paid	-$39,740
Net Cash provided by financing activities:		$56,880
Net increase/decrease in cash held		$16,510
Cash at the beginning of the year		$253,210
Cash at the end of the year		$269,720

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