Chapter 13 Homework Assignment

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4. Statement of Cash FlowsIndirect 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
   Cash		$293,690		$276,340
   Accounts receivable (net)		106,390		99,250
   Inventories		300,330		293,860
   Investments		0		113,850
   Land		154,050		0
   Equipment		331,370		259,800
   Accumulated depreciationequipment		(77,580)		(70,060)
   Total assets		$1,108,250		$973,040
   Liabilities and Stockholders' Equity
   Accounts payable (merchandise creditors)		$200,590		$191,690
   Accrued expenses payable (operating expenses)		19,950		25,300
   Dividends payable		11,080		8,760
   Common stock, $10 par		59,850		47,680
   Paid-in capital in excess of parcommon stock		224,970		132,330
   Retained earnings		591,810		567,280
   Total liabilities and stockholders equity		$1,108,250		$973,040

   Additional data obtained from an examination of the accounts in the ledger for 20Y9 are as follows:

   1. Equipment and land were acquired for cash.
   2. There were no disposals of equipment during the year.
   3. The investments were sold for $133,200 cash.
   4. The common stock was issued for cash.
   5. There was a $70,260 credit to Retained Earnings for net income.
   6. There was a $45,730 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 outflows, 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 (used for) operating activities:
   Net income	$
   Adjustments to reconcile net income to net cash flow from operating activities:
   Depreciation
   Gain on sale of investments
   Changes in current operating assets and liabilities:
   Increase in accounts receivable
   Increase in inventories
   Increase in accounts payable
   Increase in accrued expenses payable
   Net cash flow from operating activities		$
   Cash flows from (used for) investing activities:
   	$
   Net cash flow used for investing activities
   Cash flows from (used for) financing activities:
   	$
   Net cash flow from financing activities
   		$
   Cash balance, January 1, 20Y9
   Cash balance, December 31, 20Y9		$