The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and
ID: 2583384 • Letter: T
Question
The comparative balance sheet of Merrick Equipment Co. for December 31, 20Y9 and 20Y8, is as follows: Dec. 31, 20Y9 Dec. 31, 20YS Assets Cash Accounts receivable (net) Inventories Investments Land Equipment Accumulated depreciation-equipment $214,460 77,020 228,050 $231,880 84,000 237,120 121,63088,350 261,630 (61,250) $875,010 201,620 (54,370) $755,130 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 $158,380 15,750 8,750 47,250 177,630 467,250 $875,010 $148,760 6,800 37,000 102,700 440,240 $755,130 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 $79,520 cash. d. The common stock was issued for cash. e. There was a $62,500 credit to Retained Earnings for net income. f. There was a $35,490 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the indirect method of presenting Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31,20Y9 Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: tpl/exp.cengage.com/activityservice/unhtmiSjhandierjspid-781.cengegenow.comšadm.ceactivityService.activity,1511085340457& xdmp-1 Page 1Explanation / Answer
Statement of cash flow :
Cash flow from operating activities Net income 62500 Adjustment to reconcile net income Depreciation 6880 Increase account receivable (6980) Increase inventory (9070) Increase account payable 9620 Decrease accured expenses payable (3880) Increase dividend payable 1950 Loss on sale of invesment 8830 Net cash flow from operating activities 69850 Cash flow from investing activities Sale of investment 79520 Land purchased (121630) Equipment purchased (60010) Net cash flow from investing activities (102120) Cash flow from financing activities issue common stock 85180 Dividend paid (35490) Net cash flow from financing activities 49690 Net cash flow 17420 Beginning cash 214460 Ending cash 231880