The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as...

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		$302,680	$279,940
Accounts receivable (net)		109,650	100,540
Inventories		309,540	297,690
Investments		0	115,330
Land		158,760	0
Equipment		341,510	263,180
Accumulated depreciation—equipment		(79,950)	(70,970)
	Total assets	$1,142,190	$985,710

Liabilities and Stockholders' Equity
Accounts payable		$206,740	$194,180
Accrued expenses payable		20,560	25,630
Dividends payable		11,420	8,870
Common stock, $10 par		61,680	48,300
Paid-in capital: Excess of issue price over par-common stock		231,860	134,060
Retained earnings		609,930	574,670
	Total liabilities and stockholders’ equity	$1,142,190	$985,710

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 $103,800 cash.
The common stock was issued for cash.
There was a $81,590 credit to Retained Earnings for net income.
There was a $46,330 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:
	$
Adjustments to reconcile net income to net cash flow from operating activities:


Changes in current operating assets and liabilities:




Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
	$


Net cash flow used for investing activities
Cash flows from (used for) financing activities:


Net cash flow from financing activities
		$
Cash at the beginning of the year
Cash at the end of the year		$

Solutions

Expert Solution

Cash flows from operating activities:
Net income	81590
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation	8980
Loss on sale of investments	11530
Changes in current operating assets and liabilities:
Increase in accounts receivable	-9110
Increase in inventories	-11850
Increase in accounts payable	12560
Increase in accrued expenses payable	-5070
Net cash flow from operating activities		88630
Cash flows from investing activities:
Cash received from sale of investments	103800
Cash paid for purchase of land	-158760
Cash paid for purchase of equipment	-78330
Net cash flow used for investing activities		-133290
Cash flows from financing activities:
Cash from sale of common stock	111180
Cash paid for dividends	-43780
Net cash flow from financing activities		67400
Increase in cash		22740
Cash at the beginning of the year		279940
Cash at the end of the year		302680

ekkarill92 answered 1 month ago

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