The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 20Y8, is as...

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The comparative balance sheet of Merrick Equipment Co. for December 31, 2019 and 20Y8, is as follows: Dec. 31, 2049 Dec. 31,

c. The investments were sold for $101,660 cash. d. The common stock was issued for cash. e. There was a $79,890 credit to Ret

Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabi

business accounting

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Answer 1

Answer #1

Solution:

Merrick Equipment Co.

Statement of Cash Flows

For the Year Ended December 31, 20Y9

Cash flows from Operating Activities:
Net income		$79,890
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation expenses ($78,300 - $69,510)	$8,790
Loss on sale of investments ($112,950 - $101,660)	$11,290
Change in current operating assets and liabilities:
Increase in accounts receivable ($107,390 - $98,470)	-$8,920
Increase in inventory ($303,140 - $291,540)	-$11,600
Increase in accounts payable ($202,470 - $190,180)	$12,290
Decrease in occured expenses payable ($25,100 - $20,140)	-$4,960	$6,890
Net cash provided by operating activities (A)		$86,780
Cash flows from Investing Activities:
Sales of investment	$101,660
Purchase of land	-$155,490
Purchase of equipment ($334,470 - $257,760)	-$76,710
Net cash flows by Investing Activities (B)		-$130,540
Cash flows from Financing Activities
Issuance of stock (sum of changes in paid in capital and common stock)	$108,900
Payment of dividened	-$42,870
Net cash flows from financing activities (C)		$66030

Cash at the beginning of the year		$274,170
Increase in cash during the year (A+ B + C)		$22,270
Cash at the end of the year		$296,440

*

Dividened declared during the year	-$45,370
Opening dividened payable on December. 20Y8	-$8,690
Closing dividened payable on December 20Y9	$11,190
Dividened paid during year	-$42,870

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