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 $261,190   $244,930   Accounts receivable (net) 94,620   87,970   Inventories 267,110   260,450   Investments 0   100,900   Land 137,000   0   Equipment 294,700   230,270   Accumulated depreciation—equipment (68,990)   (62,090)     Total assets $985,630   $862,430         Liabilities and Stockholders' Equity     Accounts payable $178,400   $169,900   Accrued expenses payable 17,740   22,420   Dividends payable 9,860   7,760   Common stock, $10 par 53,220   42,260   Paid-in capital: Excess of issue price over par-common stock 200,080   117,290   Retained earnings 526,330   502,800     Total liabilities and stockholders’ equity $985,630   $862,430   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 $90,810 cash. The common stock was issued for cash. There was a $64,060 credit to Retained Earnings for net income. There was a $40,530 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 out flows, cash payments, decreases in cash, or any negative adjustments

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $261,190   $244,930  
Accounts receivable (net) 94,620   87,970  
Inventories 267,110   260,450  
Investments 0   100,900  
Land 137,000   0  
Equipment 294,700   230,270  
Accumulated depreciation—equipment (68,990)   (62,090)  
  Total assets $985,630   $862,430  
     
Liabilities and Stockholders' Equity    
Accounts payable $178,400   $169,900  
Accrued expenses payable 17,740   22,420  
Dividends payable 9,860   7,760  
Common stock, $10 par 53,220   42,260  
Paid-in capital: Excess of issue price over par-common stock 200,080   117,290  
Retained earnings 526,330   502,800  
  Total liabilities and stockholders’ equity $985,630   $862,430  

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 $90,810 cash.
  4. The common stock was issued for cash.
  5. There was a $64,060 credit to Retained Earnings for net income.
  6. There was a $40,530 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 out flows, cash payments, decreases in cash, or any negative adjustments.

Expert Solution
Step 1

Cash flow statement is a statement which is prepared to find out the cash comes in and goes out , by dividing it in three activities :-

  • Cash flow from operating activities
  • Cash flow from investing activities.
  • Cash flow from financing activities.

 

 

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