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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 199,110) (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 at 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: a. Equipment and land were acquired for cash, b. There were no disposals of equipment during the year. c. The investments were sold for $91,800 cash. d. The common stock was issued for cash. e. There was a $141,680 credit to Retained Warnings for net income. f. There was a $102,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flow s from operating activities.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 16, Problem 16.1BPR
Textbook Problem

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 199,110) (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 at 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. a. Equipment and land were acquired for cash,
  2. b. There were no disposals of equipment during the year.
  3. c. The investments were sold for $91,800 cash.
  4. d. The common stock was issued for cash.
  5. e. There was a $141,680 credit to Retained Warnings for net income.
  6. f. There was a $102,000 debit to Retained Earnings for cash dividends declared.

Instructions

Prepare a statement of cash flows, using the indirect method of presenting cash flow s from operating activities.

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Chapter 16 Solutions

Accounting
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