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 (merchandise creditors) $205,700 $194,140 Accrued expenses payable (operating expenses) 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 out flows, 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,...

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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 (merchandise creditors)	$205,700		$194,140
Accrued expenses payable (operating expenses)	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 out flows, cash payments, decreases in cash, or any negative adjustments.

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