Chapter 16 Statement of Cash Flows blems Series B PR 16-18 Statement of cash flo

Question

Chapter 16 Statement of Cash Flows blems Series B PR 16-18 Statement of cash flows-indirect method flow from ctivities, The comparative balance sheet of Merrick Equipment 2013, is as follows: 0B1.2 sheet of Merrick Equipment Co. for December 31, 2014 and Dec. 31, 2014 Dec. 31, 2013 Assets Cash Accounts receivable (net) Inventories Investments $ 47,940 188,190 289,850 102,000 70,720 207,230 298,520 Equipment Accumulated depreciation-equipment 295,800 438,600 (99,110 358,020 .. $1,211,760 $901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors).. Accrued expenses payable (operating expenses. Dividends payable... $ 205,700 5194,140 30,600 25,500 202,000 354,000 393,960 $1,211,760 26,860 20,400 102,000 204,000 354,280 $901,680 " Paid-in capital: Excess of issue price over par--common stock Retained earnings... Additional data obtained from an examination of the accounts in the ledger for 2014 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 Earnings 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 flo from operating activities

Explanation / Answer

Cash Flow From Operating Activities Net Income 141680 Less: Increase in accounts Receivable 188190-207230 -19040 Increase in Inventories 289850-298520 -8670 Add Depreciation 99110-84320 14790 Accounts Payable 205700-194140 11560 Accrued Expenses 30600-26860 3740 Loss On Investment 102000-91800 10200 Cash Flow From Operating Activities 154260

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