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 $230,940   $216,560   Accounts receivable (net) 83,660   77,780   Inventories 236,170   230,280   Investments 0   89,220   Land 121,130   0   Equipment 260,570   203,600   Accumulated depreciation—equipment (61,000)   (54,900)   Total assets $871,470   $762,540         Liabilities and Stockholders' Equity     Accounts payable (merchandise creditors) $157,740   $150,220   Accrued expenses payable (operating expenses) 15,690   19,830   Dividends payable 8,710   6,860   Common stock, $10 par 47,060   37,360   Paid-in capital in excess of par—common stock 176,910   103,710   Retained earnings 465,360   444,560   Total liabilities and stockholders’ equity $871,470   $762,540   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 $104,390 cash. The common stock was issued for cash. There was a $56,640 credit to Retained Earnings for net income. There was a $35,840 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 And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter13: Statement Of Cash Flows
Section: Chapter Questions
Problem 3PA: Statement of cash flowsindirect method The comparative balance sheet of Whitman Co. at December 31,...
icon
Related questions
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 $230,940   $216,560  
Accounts receivable (net) 83,660   77,780  
Inventories 236,170   230,280  
Investments 0   89,220  
Land 121,130   0  
Equipment 260,570   203,600  
Accumulated depreciation—equipment (61,000)   (54,900)  
Total assets $871,470   $762,540  
     
Liabilities and Stockholders' Equity    
Accounts payable (merchandise creditors) $157,740   $150,220  
Accrued expenses payable (operating expenses) 15,690   19,830  
Dividends payable 8,710   6,860  
Common stock, $10 par 47,060   37,360  
Paid-in capital in excess of par—common stock 176,910   103,710  
Retained earnings 465,360   444,560  
Total liabilities and stockholders’ equity $871,470   $762,540  

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 $104,390 cash.
  4. The common stock was issued for cash.
  5. There was a $56,640 credit to Retained Earnings for net income.
  6. There was a $35,840 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

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Cash Flow Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning