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 $246,670 $230,250 Accounts receivable (net) 89,360 82,700 Inventories 252,250 244,840 Investments 0 94,860 Land 129,390 0 Equipment 278,320 216,470 Accumulated depreciation—equipment (65,160) (58,370) Total assets $930,830 $810,750 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $168,480 $159,720 Accrued expenses payable (operating expenses) 16,750 21,080 Dividends payable 9,310 7,300 Common stock, $10 par 50,260 39,730 Paid-in capital in excess of par—common stock 188,960 110,260 Retained earnings 497,070 472,660 Total liabilities and stockholders’ equity $930,830 $810,750 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 $110,990 cash. The common stock was issued for cash. There was a $62,520 credit to Retained Earnings for net income. There was a $38,110 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.

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

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	$246,670		$230,250
Accounts receivable (net)	89,360		82,700
Inventories	252,250		244,840
Investments	0		94,860
Land	129,390		0
Equipment	278,320		216,470
Accumulated depreciation—equipment	(65,160)		(58,370)
Total assets	$930,830		$810,750

Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors)	$168,480		$159,720
Accrued expenses payable (operating expenses)	16,750		21,080
Dividends payable	9,310		7,300
Common stock, $10 par	50,260		39,730
Paid-in capital in excess of par—common stock	188,960		110,260
Retained earnings	497,070		472,660
Total liabilities and stockholders’ equity	$930,830		$810,750

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 $110,990 cash.
The common stock was issued for cash.
There was a $62,520 credit to Retained Earnings for net income.
There was a $38,110 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.

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