The comparative balance sheet of Merrick Equipment Co for De

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		$908,730

Solution

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