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

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

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		$241,300	$224,720
Accounts receivable (net)		87,410	80,710
Inventories		246,760	238,960
Investments		0	92,580
Land		126,570	0
Equipment		272,250	211,270
Accumulated depreciation—equipment		(63,740)	(56,970)
	Total assets	$910,550	$791,270

Liabilities and Stockholders' Equity
Accounts payable		$164,810	$155,880
Accrued expenses payable		16,390	20,570
Dividends payable		9,110	7,120
Common stock, $10 par		49,170	38,770
Paid-in capital: Excess of issue price over par-common stock		184,840	107,610
Retained earnings		486,230	461,320
	Total liabilities and stockholders’ equity	$910,550	$791,270

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 $83,320 cash.
The common stock was issued for cash.
There was a $62,100 credit to Retained Earnings for net income.
There was a $37,190 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

Statement of Cash Flows - Indirect Method
	Amount in $	Amount in $
Net income		$ 62,100
Cash flows from operating activities
Adjustments for:
Depreciation	$ 6,770
Loss on sale of Investment	$ 9,260
(Increase) / Decrease in Account receivables	$ -6,700
Inventory Decrease / (Increase)	$ -7,800
Accounts payable Increase / ( Decrese)	$ 8,930
income tax payable	$ -4,180
		$ 6,280

Net cash from operating activities		$ 68,380

Cash flows from investing activities
Purchase of Equipment	$ -60,980
Purchase of Land	$ -1,26,570
Sale of Investment	$ 83,320
Net cash used in investing activities		$ -1,04,230

Cash flows from Financing activities
Issue of Common Stock	$ 87,630
Dividend Paid (37,190 + 7120 - 9110	$ -35,200
Net cash used in financing activities		$ 52,430

Net increase in cash and cash equivalents		$ 16,580

Add :Cash and cash equivalents at beginning of period		$ 2,24,720

Cash and cash equivalents at end of period		$ 2,41,300

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Answer 2

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