Question

Question 2 The following three accounts appear in the general ledger of Herrick Corp. during 2020. Equipment Debit Credit Date Jan. 1 July 31 Sept. 2 Nov. 10 Balance Purchase of equipment Cost of equipment constructed Cost of equipment sold 71,900 55,000 Balance 160,000 231,900 286,900 238,700 48,200 Date Credit Jan. 1 Nov. 10 Dec. 31 Accumulated Depreciation-Equipment Debit Balance Accumulated depreciation on equipment sold 30,700 Depreciation for year Balance 70,100 39,400 64,400 25,000 Retained Earnings Debit Credit Date Jan. 1 Aug. 23 Dec. 31 Balance Dividends (cash) Net income Balance 105,200 86,300 152,400 18,900 66,100 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 $5,200. (Hint: Cost of equipment constructed is reported in the investing activities section as a decrease in cash of $55,000.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

these are the box choices to choose from (fill out accordingly please)

Answer 1

Herrick Corp
Statement of cash flows
Cash from Operating activities
Net income		66100
Adjustments to reconcile net income
Depreciation expense	25000
Loss on disposal of plant asset	5,200
		30,200
Net cash provided by operating activities (A)		96,300
Cash flows from investing activities:
Purchase of equipment	-71900
Equipment construction	-55000
Disposal of plant asset(equipment)	12300
Net cash provided by investing activities (B)		-1,14,600
Cash flows from financing activities:
Cash payments for dividends	-18,900
Net cash provided by financing activities (C)		-18,900
Net increase in cash during the year (A+B+C)		-37,200
Cash balance, January 1, 2015
Cash balance, December 31, 2015