Statement of Cash Flows—Indirect Method 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 $70,720   $47,940   Accounts receivable (net) 207,230   188,190   Inventories 298,520   289,850   Investments 0   102,000   Land 295,800   0   Equipment 438,600   358,020   Accumulated depreciation—equipment (99,110)   (84,320)     Total assets $1,211,760   $901,680         Liabilities and Stockholders' Equity     Accounts payable $205,700   $194,140   Accrued expenses payable 30,600   26,860   Dividends payable 25,500   20,400   Common stock, $1 par 202,000   102,000   Paid-in capital: Excess of issue price over par—common stock 354,000   204,000   Retained earnings 393,960   354,280     Total liabilities and stockholders' equity $1,211,760   $901,680   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 $91,800 cash. The common stock was issued for cash. There was a $141,680 credit to Retained Earnings for net income. There was a $102,000 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:       $fill in the blank 2   Adjustments to reconcile net income to net cash flow from operating activities:       fill in the blank 4     fill in the blank 6   Changes in current operating assets and liabilities:       fill in the blank 8     fill in the blank 10     fill in the blank 12     fill in the blank 14   Net cash flow from operating activities   $fill in the blank 15 Cash flows from (used for) investing activities:       $fill in the blank 17     fill in the blank 19     fill in the blank 21   Net cash flow used for investing activities   fill in the blank 22 Cash flows from (used for) financing activities:       $fill in the blank 24     fill in the blank 26   Net cash flow from financing activities   fill in the blank 27     $fill in the blank 29 Cash at the beginning of the year   fill in the blank 30 Cash at the end of the year   $fill in the blank 31

Question

Statement of Cash Flows—Indirect Method

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 $70,720   $47,940  
Accounts receivable (net) 207,230   188,190  
Inventories 298,520   289,850  
Investments 0   102,000  
Land 295,800   0  
Equipment 438,600   358,020  
Accumulated depreciation—equipment (99,110)   (84,320)  
  Total assets $1,211,760   $901,680  
     
Liabilities and Stockholders' Equity    
Accounts payable $205,700   $194,140  
Accrued expenses payable 30,600   26,860  
Dividends payable 25,500   20,400  
Common stock, $1 par 202,000   102,000  
Paid-in capital: Excess of issue price over par—common stock 354,000   204,000  
Retained earnings 393,960   354,280  
  Total liabilities and stockholders' equity $1,211,760   $901,680  

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 $91,800 cash.
  4. The common stock was issued for cash.
  5. There was a $141,680 credit to Retained Earnings for net income.
  6. There was a $102,000 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:    
  $fill in the blank 2  
Adjustments to reconcile net income to net cash flow from operating activities:    
  fill in the blank 4  
  fill in the blank 6  
Changes in current operating assets and liabilities:    
  fill in the blank 8  
  fill in the blank 10  
  fill in the blank 12  
  fill in the blank 14  
Net cash flow from operating activities   $fill in the blank 15
Cash flows from (used for) investing activities:    
  $fill in the blank 17  
  fill in the blank 19  
  fill in the blank 21  
Net cash flow used for investing activities   fill in the blank 22
Cash flows from (used for) financing activities:    
  $fill in the blank 24  
  fill in the blank 26  
Net cash flow from financing activities   fill in the blank 27
    $fill in the blank 29
Cash at the beginning of the year   fill in the blank 30
Cash at the end of the year   $fill in the blank 31

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Cash Flow Statements

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