Dec. 31, 20Y9 Dec. 31, 20Y8 Assets $ 70,720 $ 47,940 Cash Accounts receivable (net). 207,230 188,190 Inventories 298,520 289,850 Investments 102,000 Land 295,800 438,600 Equipment.. Accumulated depreciation-equipment. Total assets. 358,020 (99,110) $1,211,760 (84,320) $ 901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors).. Accrued expenses payable (operating expenses) Dividends payable..... Common stock, $1 par.. Paid-in capital in excess of par-common stock. Retained earnings.... Total liabilities and stockholders' equity.. $ 205,700 $ 194,140 30,600 26,860 25,500 20,400 202,000 102,000 354,000 204,000 393,960 $1,211,760 354,280 $ 901,680 The income statement for the year ended December 31, 20Y9, is as follows: Sales .. Cost of goods sold.. $2023,898 (1,245,476) $ 778,422 Gross profit.. Operating expenses: Depreciation expense . $ 14,790 Other operating expenses 517,299 Total operating expenses (532,089) $ 246,333 Operating income.. Other expenses: Loss on sale of investments (10,200) $ 236,133 Income before income tax Income tax expense .. (94,453) Net income $ 141,680

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

The comparative balance sheet of Merrick Equipment Co. for Dec. 31 20Y9 and 20Y8 is:

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:
a. Equipment and land were acquired for cash.
b. There were no disposals of equipment during the year.
c. The investments were sold for $91,800 cash.
d. The common stock was issued for cash.
e. There was a $102,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a statement of cash flows, using the direct method of presenting cash flows from operat­ ing activities

Dec. 31, 20Y9
Dec. 31, 20Y8
Assets
$ 70,720
$ 47,940
Cash
Accounts receivable (net).
207,230
188,190
Inventories
298,520
289,850
Investments
102,000
Land
295,800
438,600
Equipment..
Accumulated depreciation-equipment.
Total assets.
358,020
(99,110)
$1,211,760
(84,320)
$ 901,680
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)..
Accrued expenses payable (operating expenses)
Dividends payable.....
Common stock, $1 par..
Paid-in capital in excess of par-common stock.
Retained earnings....
Total liabilities and stockholders' equity..
$ 205,700
$ 194,140
30,600
26,860
25,500
20,400
202,000
102,000
354,000
204,000
393,960
$1,211,760
354,280
$ 901,680
Transcribed Image Text:Dec. 31, 20Y9 Dec. 31, 20Y8 Assets $ 70,720 $ 47,940 Cash Accounts receivable (net). 207,230 188,190 Inventories 298,520 289,850 Investments 102,000 Land 295,800 438,600 Equipment.. Accumulated depreciation-equipment. Total assets. 358,020 (99,110) $1,211,760 (84,320) $ 901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors).. Accrued expenses payable (operating expenses) Dividends payable..... Common stock, $1 par.. Paid-in capital in excess of par-common stock. Retained earnings.... Total liabilities and stockholders' equity.. $ 205,700 $ 194,140 30,600 26,860 25,500 20,400 202,000 102,000 354,000 204,000 393,960 $1,211,760 354,280 $ 901,680
The income statement for the year ended December 31, 20Y9, is as follows:
Sales ..
Cost of goods sold..
$2023,898
(1,245,476)
$ 778,422
Gross profit..
Operating expenses:
Depreciation expense .
$ 14,790
Other operating expenses
517,299
Total operating expenses
(532,089)
$ 246,333
Operating income..
Other expenses:
Loss on sale of investments
(10,200)
$ 236,133
Income before income tax
Income tax expense ..
(94,453)
Net income
$ 141,680
Transcribed Image Text:The income statement for the year ended December 31, 20Y9, is as follows: Sales .. Cost of goods sold.. $2023,898 (1,245,476) $ 778,422 Gross profit.. Operating expenses: Depreciation expense . $ 14,790 Other operating expenses 517,299 Total operating expenses (532,089) $ 246,333 Operating income.. Other expenses: Loss on sale of investments (10,200) $ 236,133 Income before income tax Income tax expense .. (94,453) Net income $ 141,680
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