The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and
ID: 2400534 • Letter: T
Question
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows:
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 $95,690 cash.
D) The common stock was issued for cash.
E) There was a $67,510 credit to Retained Earnings for net income.
F) There was a $42,710 debit to Retained Earnings for cash dividends declared.
Required:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
A) cash used for dividends,
B) cash paid for land,
C) cash from sales of investments
D) cash from sales of common stock
E) loss of sale on investment
F) net income
A) acummulated depreciation
B) cash paid for land
C) cash used for dividends $___________
d) cash for sale of common stock
e) depreciation
f) retainiong earnings
A) cash used for dividends
B) cash recieved from the sale of common stock
C) cash recieved from net income $________
D) gain on sale of investments
e) Loss on sale of investment
F) retained earnings
A) decrease in accts recievable
B) decrease in accts payable $_________
C) decrease in inventories $_________
D) depreciation $_________
E) increase in accts recievable $__________
F) loss of sales on investment ____________________________
B) decrease in accts recievable
C) decrease in inventory
D) gain on sale of investment
E) increase in accrued expense
F) increase in inventory
A) decrease in accts payable
B) decrease in accts recievable
C) decrease in inventory
D) increase in accts payable
E) increase in accrued expense
F) loss on sale of investments
A) decrease in accts payable
B) decrease in accrued expenses payable
C) decrease in dividends payable
D) depreciation
E) increase in accrued expenses payable
F) increase in land
A) cash recieved from gain on sale of investments
C) cash recieved from net income
D) cash from sale of common stock
E) cash from sales of investment
F) cash recieved from retained earnings
A) cash paid for accts payable
B) cash paid for accumulated depreciation
C) cash paid for common stocks
D) cash paid for depreciation
E) cash used for dividends
F) cash used for purchase of land
A) cash paid for accts recievable
B) cash paid for accrued expenses
C) cash paid for accumulated depreciation
D) cash paid for inventories
E) cash used for purchase of equipment
F) cash paid for retained earnings
A) cash recieved from income
B) cash from sale of common stock
C) cash recieved from sale of equipment
D) cash recieved from sale of inventory
E) cash from sale of investments
D) cash recieved from retained earnings
A) cash used fro dividends
B) cash paid for inventories
C) cash used for purchase of equipment
D) cash paid for purchase of investments
E) cash used for purchase of land
F) cash paid for retained earnings
A) Decrease in cash
B) Increase in cash
Dec. 31, 20Y9 Dec. 31, 20Y8 Assets Cash $275,220 $258,080 Accounts receivable (net) 99,700 92,690 Inventories 281,440 274,440 Investments 0 106,320 Land 144,360 0 Equipment 310,530 242,630 Accumulated depreciation—equipment (72,700) (65,430) Total assets $1,038,550 $908,730 Liabilities and Stockholders' Equity Accounts payable $187,980 $179,020 Accrued expenses payable 18,690 23,630 Dividends payable 10,390 8,180 Common stock, $10 par 56,080 44,530 Paid-in capital: Excess of issue price over par-common stock 210,830 123,590 Retained earnings 554,580 529,780 Total liabilities and stockholders’ equity $1,038,550 $908,730Explanation / Answer
Merrick equipment co
statement of cash flows for the year ended
Particulars
$
$
Net income
67510
Adjustments to be made:
Add: Depreciation
7270
Add: Loss on sale of investments(106320-95690)
10630
Changes in working capital
Add:
Increase in Accounts Payable
8960
Increase in dividend payable
2210
Less:
Increase in accounts receivable
-7010
Increase in inventories
-7000
Decrease of Accrued expense payable
-4940
-7780
Cash flows from operating activities
77630
Cash flows from investing activities
Sale of investments
95690
Purchase of land
-144360
Purchase of equipment
-67900
Net cash used in investing activities
-116570
Cash flows from financing activities
Dividend Paid
-42710
Proceeds from the issuance of common stock
11550
Process from the Paid in capital in excess of issue price
87240
Cash flows from financing activities
56080
Net cash
17140
Cash flows in the beginning
258080
cash flows in the end
275220
Merrick equipment co
statement of cash flows for the year ended
Particulars
$
$
Net income
67510
Adjustments to be made:
Add: Depreciation
7270
Add: Loss on sale of investments(106320-95690)
10630
Changes in working capital
Add:
Increase in Accounts Payable
8960
Increase in dividend payable
2210
Less:
Increase in accounts receivable
-7010
Increase in inventories
-7000
Decrease of Accrued expense payable
-4940
-7780
Cash flows from operating activities
77630
Cash flows from investing activities
Sale of investments
95690
Purchase of land
-144360
Purchase of equipment
-67900
Net cash used in investing activities
-116570
Cash flows from financing activities
Dividend Paid
-42710
Proceeds from the issuance of common stock
11550
Process from the Paid in capital in excess of issue price
87240
Cash flows from financing activities
56080
Net cash
17140
Cash flows in the beginning
258080
cash flows in the end
275220