Statement of cash flows—indirect methodThe comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:Line Item DescriptionDecember 31, 20Y9December 31, 20Y8Assets Cash$305,280$281,690Accounts receivable (net)110,590101,170Inventories312,180299,530Investments0116,050Land160,1300Equipment344,450264,830Accumulated depreciation—equipment(80,640)(71,410)Total assets$1,151,990$991,860Liabilities and Stockholders' Equity Accounts payable (merchandise creditors)$208,510$195,400Accrued expenses payable (operating expenses)20,74025,790Dividends payable11,5208,930Common stock, $10 par62,21048,600Paid-in capital in excess of par—common stock233,850134,890Retained earnings615,160578,250Total liabilities and stockholders' equity$1,151,990$991,860Additional 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 $135,780 cash.The common stock was issued for cash.There was a $83,530 credit to Retained Earnings for net income.There was a $46,620 debit to Retained Earnings for cash dividends declared.Required:Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) 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 FlowsFor the Year Ended December 31, 20Y9Line Item DescriptionAmountAmountCash flows from (used for) operating activities:blank $- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities:blank - Select - - Select - Changes in current operating assets and liabilities:blank - Select - - Select - - Select - - Select - blank$- Select -Cash flows from (used for) investing activities:blank $- Select - - Select - - Select - blank- Select -Cash flows from (used for) financing activities:blank $- Select - - Select - blank- Select - blank$- Select -Cash balance, January 1, 20Y9blankCash balance, January 1, 20Y9Cash balance, December 31, 20Y9blank$Cash balance, December 31, 20Y9

Cash Flow Statement - The Statement Of Cash Flows Indicates The Amount Of Cash Earned And Spent By…

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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:

Line Item Description	December 31, 20Y9	December 31, 20Y8
Assets
Cash	$305,280	$281,690
Accounts receivable (net)	110,590	101,170
Inventories	312,180	299,530
Investments	0	116,050
Land	160,130	0
Equipment	344,450	264,830
Accumulated depreciation—equipment	(80,640)	(71,410)
Total assets	$1,151,990	$991,860
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$208,510	$195,400
Accrued expenses payable (operating expenses)	20,740	25,790
Dividends payable	11,520	8,930
Common stock, $10 par	62,210	48,600
Paid-in capital in excess of par—common stock	233,850	134,890
Retained earnings	615,160	578,250
Total liabilities and stockholders' equity	$1,151,990	$991,860

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 $135,780 cash.
The common stock was issued for cash.
There was a $83,530 credit to Retained Earnings for net income.
There was a $46,620 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) 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 FlowsFor the Year Ended December 31, 20Y9

Line Item Description	Amount	Amount
Cash flows from (used for) operating activities:	blank
	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:	blank
	- Select -
	- Select -
Changes in current operating assets and liabilities:	blank
	- Select -
	- Select -
	- Select -
	- Select -
	blank	$- Select -
Cash flows from (used for) investing activities:	blank
	$- Select -
	- Select -
	- Select -
	blank	- Select -
Cash flows from (used for) financing activities:	blank
	$- Select -
	- Select -
	blank	- Select -
	blank	$- Select -
Cash balance, January 1, 20Y9	blank	Cash balance, January 1, 20Y9
Cash balance, December 31, 20Y9	blank	$Cash balance, December 31, 20Y9

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The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows: Line Item Description December 31, 20Y9 December 31, 20Y8 Assets