Concept explainers
Statement of
The Comparative balance sheet of Merrick Equipment Co. for Dec. 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 |
(99,110) | (184,320) |
Total assets............................................ | $1,211,760 | $901,680 |
Liabilities and |
||
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 |
393,960 | 354,280 | |
Total liabilities and stockholders' equity.................. | $1,211,760 | $901,680 |
The income statement for the year ended December 31. 20Y9, is as follows:
Sales........................................... | $2,023,898 | |
Cost of merchandise sold........................ | 1,245,476 | |
Gross profit..................................... | $ 778,422 | |
Operating expenses: | ||
Depreciation expense........................ | $ 14,790 | |
Other operating expenses.................... | 517,299 | |
Total operating expenses.................. | 532,089 | |
Operating income............................... | $ 246,333 | |
Other expenses: | ||
Loss on sale of investments................... | (10,200) | |
Income before income tax....................... | $ 236,133 | |
Income tax expense............................. | 94,453 | |
Net income..................................... | $ 141,680 |
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 $102,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.
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Chapter 16 Solutions
Accounting
- Statement of cash flows indirect method The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows: Dec. 31, 20Y4 Dec. 31, 20Y3 Assets Cash 443,240 360,920 Accounts receivable {net 665,280 592,200 Inventories 887,880 1,022,560 Prepaid expenses 31,640 25,200 Land 302,400 302,400 Buildings 1,713,600 1,134,000 Accumulated depreciationbuildings (466,200) (414,540) Machinery and equipment 781,200 781,200 Accumulated depreciationmachinery and equipment (214,200) (191,520) Patents 106,960 112,000 Total assets 4,251,800 3,724,420 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors|) 837,480 927,080 Dividends payable 32,760 25,200 Salaries payable 78,960 87,080 Mortgage note payable, due in nine years 224,000 0 Bonds payable 0 390,000 Common stock, 5 par 200,400 50,400 Paid-in capital. Excess of issue price over parcommon stock 366,000 126,000 Retained earnings 2,512,200 2,118,660 Total liabilities and stockholders' equity 4,251,800 3,724,420 An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4: A. Net income, 524,580. B. Depreciation expense reported on the income statement: buildings, 51,660; machinery and equipment, 22,680. C. Patent amortization reported on the income statement, 5,040. D. A building was constructed for 579,600. E. A mortgage note for 224,000 was issued for cash. F. 30,000 shares of common stock were issued at 13 in exchange for the bonds payable. G. Cash dividends declared, 131,040. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.arrow_forwardStatement of cash flowsdirect method applied to PR 13-1A The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: A. The investments were sold for 175,000 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a 90,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.arrow_forwardDetermining selected amounts for cash flows from operating activitiesdirect method Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: Balance, December 31 Balance, January 1 Accrued expenses payable (operating expenses) 12,650 14,030 Accounts payable (merchandise creditors) 96,140 105,800 Inventories 178,020 193,430 During the current year, the cost of merchandise sold was 1,031,550 and the operating expenses other than depreciation were 179,400. The direct method is used for presenting the cash flows from operating activities on the statement of cash flows. Determine the amount reported on the statement of cash flows for (a) cash payments for merchandise and (b) cash payments for operating expenses.arrow_forward
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