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: Equipment and land were acquired for cash. There were no disposals of equipment during the year. The investments were sold for $82,680 cash. The common stock was issued for cash. There was a $61,630 credit to Retained Earnings for net income. 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

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: Equipment and land were acquired for cash. There were no disposals of equipment during the year. The investments were sold for $82,680 cash. The common stock was issued for cash. There was a $61,630 credit to Retained Earnings for net income. 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

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

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:

Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The investments were sold for $82,680 cash.
The common stock was issued for cash.
There was a $61,630 credit to Retained Earnings for net income.
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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