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nment takeAssignmentMain.do'linvokereas eAssignmentSessionL ocator- assignment takeinprogress - false Oriline te." , eBook Show Me How Calculator 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 $232,380 84,180 237,640 $216,660 77,820 230,400 89,260 Cash Accounts receivable (net) Inventories Investments Land Equipment 121,890 262,190 (61,380) $876,900 203,690 (54,930) $762,900 Accumulated depreciation-equipment Total assets Liabilities and Stockholders" Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par Paid-in capital: Excess of issue price over par-common stock Retained earnings $158,720 15,780 8,770 47,350 178,010 468,270 $876,900 $150,290 19,840 6,870 37,380 103,750 444,77o $762,900 Total liabilities and stockholders' equity 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 $80,330 cash. d. The common stock was issued for cash. e. There was a $59,360 credit to Retained Earnings for net income. Check Hy Work

Explanation / Answer

MERRICK EQUIPMENT CO. Statement of Cash Flows For the Year Ended December 31, 20Y9 Cash flows from operating activities: Net income $59,360 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 6,450 (61380-54930) Loss on sale of investments 8,930 (89260-80330) Changes in current operating assets and liabilities: Increase in accounts receivable -6,360 (84180-77820) Increase in inventories -7,240 (237640-230400) Increase in accounts payable 8,430 (158720-150290) Decrease in accrued expenses payable -4,060 (19840+15780) Net cash flow from operating activities $65,510 Cash flows from investing activities: Cash received from sale of investments $80,330 Less: Cash paid for purchase of land $121,890 Cash paid for purchase of equipment 58,500 180,390 (262190-203690) Net cash flow used for investing activities -100,060 Cash flows from financing activities: Cash received from sale of common stock $84,230 (47350+178010-37380-103750) Less: Cash paid for dividends* -33,960 Net cash flow from financing activities 50,270 Increase in cash $15,720 Cash at the beginning of the year 216,660 Cash at the end of the year $232,380 * $35,860 + $6,870 – $8,770 = $33,960

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