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In: Accounting

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 $249,490 $231,820
Accounts receivable (net) 90,380 83,260
Inventories 255,140 246,510
Investments 0 95,500
Land 130,870 0
Equipment 281,500 217,940
Accumulated depreciation—equipment (65,900) (58,770)
Total assets $941,480 $816,260
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $170,410 $160,800
Accrued expenses payable (operating expenses) 16,950 21,220
Dividends payable 9,410 7,350
Common stock, $10 par 50,840 40,000
Paid-in capital in excess of par—common stock 191,120 111,010
Retained earnings 502,750 475,880
Total liabilities and stockholders’ equity $941,480 $816,260

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 $111,740 cash.
  4. The common stock was issued for cash.
  5. There was a $65,230 credit to Retained Earnings for net income.
  6. There was a $38,360 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 (used for) operating activities:
Net income $
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Loss on sale of investments
Changes in current operating assets and liabilities:
Increase in accounts receivable
Increase in inventories
Increase in accounts payable
Decrease in accrued expenses payable
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:
Cash received from sale of common stock $
Cash paid for dividends
Net cash flow from financing activities
Net increase in cash $
Cash balance, January 1, 20Y9
Cash balance, December 31, 20Y9 $

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ekkarill92 answered 2 years ago
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