Chapter 16 1B 785 Chapter 16 Statement of Cash Flows ds declared. Problems: Seri

ID: 2535468 • Letter: C

Question

Chapter 16 1B

785 Chapter 16 Statement of Cash Flows ds declared. Problems: Series B cing cash flows from Net cash flow from operating activities, S154,260 d 2015, is as follows: 16 Dec. 31, 2015 OBJ. 2 PR 16-18 Statement of cash flows-indirect method The comparative balance sheet of Merrick Equipment Co, for December 31, 2016 and Dec. 31, 2015 2015, is as follows: Dec. 31, 2016 Assets S 70,720 $ 47,940 207,230 188,190 Cash ... Accounts receivable (net).. 289,850 298520 102,000 Inventories .........- Investments ... 295,800 Land. 358,020 438,600 Equipment.. (84 320 (99,110) $901.680 Accumulated depreciation--equipment ... $1,211,760 Total assets ... Liabilities and Stockholders' Equity $ 205,700 $194,140 Accounts payable (merchandise creditors) .... 26,860 30,600 20,400 Accrued expenses payable (operating expenses) 25,500 Dividends payable...... 202.000 102,000 Common stock, S1 par....... 354,000 204,000 Pald-in capital Excess of issue price over par--common stock.... 393,960 354,280 Retained earnings..... $1,211,760 $901.680 Total liabilities and stockholders' equity... S 585,920 208,960 617,120 240,000 553,120 (148,000 $2,057,120 $ 404,960 52,640 19,200 100,000 280,000 1.200,320 $2,057,120 s follows: Additional data obtained from an examination of the accounts in the ledger for 2016 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 . 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 flows from operating activities. $ 5,372,559 3,306,190 $2.066,369 1 773.802

Explanation / Answer

Particulars

Amount($)

Net Income

141680

Add: depreciation

14790

Add: Loss on sales of investments

10200

Adjustments for changes in working capital:

Increase in accounts receivables

-19040

Increase in inventory

-8670

Increase in accounts payable

11560

Increase in accrued expenses payable

3740

154260

Equipment Acquired

-80580

Land Acquired

-295800

Investment sold

91800

Cash used in investing activities

-284580

Dividend paid

-96900

Common stock issued

250000

Cash flow from financing activities

153100

Net increase in cash

22780

Beginning cash balance

47940

Ending cash balance

70720