FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Statement of Cash Flows—Indirect Method

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 $239,460   $223,010  
Accounts receivable (net) 86,750   80,100  
Inventories 244,880   237,150  
Investments 0   91,870  
Land 125,600   0  
Equipment 270,190   209,660  
Accumulated depreciation—equipment (63,250)   (56,540)  
  Total assets $903,630   $785,250  
     
Liabilities and Stockholders' Equity    
Accounts payable $163,560   $154,690  
Accrued expenses payable 16,270   20,420  
Dividends payable 9,040   7,070  
Common stock, $10 par 48,800   38,480  
Paid-in capital: Excess of issue price over par-common stock 183,440   106,790  
Retained earnings 482,520   457,800  
  Total liabilities and stockholders’ equity $903,630   $785,250  

Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

  1. Equipment and land were acquired for cash.
  2. There were no disposals of equipment during the year.
  3. The investments were sold for $82,680 cash.
  4. The common stock was issued for cash.
  5. There was a $61,630 credit to Retained Earnings for net income.
  6. There was a $36,910 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:    
  $fill in the blank 2  
Adjustments to reconcile net income to net cash flow from operating activities:    
  fill in the blank 4  
  fill in the blank 6  
Changes in current operating assets and liabilities:    
  fill in the blank 8  
  fill in the blank 10  
  fill in the blank 12  
  fill in the blank 14  
Net cash flow from operating activities   $fill in the blank 15
Cash flows from (used for) investing activities:    
  $fill in the blank 17  
  fill in the blank 19  
  fill in the blank 21  
Net cash flow used for investing activities   fill in the blank 22
Cash flows from (used for) financing activities:    
  fill in the blank 24  
  fill in the blank 26  
Net cash flow from financing activities   fill in the blank 27
    $fill in the blank 29
Cash at the beginning of the year   fill in the blank 30
Cash at the end of the year   $fill in the blank 31
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