FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
Statement of
The comparative
| Dec. 31, 20Y9 | Dec. 31, 20Y8 | ||||
| Assets | |||||
| Cash | $70,720 | $47,940 | |||
| 207,230 | 188,190 | ||||
| Inventories | 298,520 | 289,850 | |||
| Investments | 0 | 102,000 | |||
| Land | 295,800 | 0 | |||
| Equipment | 438,600 | 358,020 | |||
| (99,110) | (84,320) | ||||
| Total assets | $1,211,760 | $901,680 | |||
| Liabilities and |
|||||
| Accounts payable | $205,700 | $194,140 | |||
| Accrued expenses payable | 30,600 | 26,860 | |||
| Dividends payable | 25,500 | 20,400 | |||
| Common stock, $1 par | 202,000 | 102,000 | |||
| Paid-in capital: Excess of issue price over par—common stock | 354,000 | 204,000 | |||
| 393,960 | 354,280 | ||||
| Total liabilities and stockholders' equity | $1,211,760 | $901,680 |
The income statement for the year ended December 31, 20Y9, is as follows:
| Sales | $2,023,898 | |
| Cost of merchandise sold | 1,245,476 | |
| Gross profit | $778,422 | |
| Operating expenses: | ||
| Depreciation expense | $14,790 | |
| Other operating expenses | 517,299 | |
| Total operating expenses | 532,089 | |
| Operating income | $246,333 | |
| Other expenses: | ||
| Loss on sale of investments | (10,200) | |
| Income before income tax | $236,133 | |
| Income tax expense | 94,453 | |
| Net income | $141,680 |
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 $91,800 cash.
- The common stock was issued for cash.
- There was a $102,000 debit to Retained Earnings for cash dividends declared.
Required:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate
| Merrick Equipment Co. | ||
| Statement of Cash Flows | ||
| For the Year Ended December 31, 20Y9 | ||
| Cash flows from operating activities: | ||
| Cash received from customers | $fill in the blank 2 | |
| Cash payments for merchandise | fill in the blank 4 | |
| Cash payments for operating expenses | fill in the blank 6 | |
| Cash payments for taxes | fill in the blank 8 | |
| Net cash flow from operating activities | $fill in the blank 9 | |
| Cash flows from (used for) investing activities: | ||
| Cash from sale of investments | $fill in the blank 11 | |
| Cash used for purchase of land | fill in the blank 13 | |
| Cash used for purchase of equipment | fill in the blank 15 | |
| Net cash flow used for investing activities | fill in the blank 16 | |
| Cash flows from (used for) financing activities: | ||
| Cash from sale of common stock | $fill in the blank 18 | |
| Cash used for dividends | fill in the blank 20 | |
| Net cash flow from financing activities | fill in the blank 21 | |
| Increase in cash | $fill in the blank 23 | |
| Cash at the beginning of the year | fill in the blank 24 | |
| Cash at the end of the year | $fill in the blank 25 |
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