Statement of Cash FlowsIndirect Method The comparative balan

Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equlpment Co. for December 31, 20Y9 and 20YB, Is as follows Dec. 31, 20Y9 Dec. 31, 20Y8 Assets Cash Accounts recelvable (net) Inventorles Investments Land Equipment $283,710 $263,920 94,790 290,140 280,640 0 108,730 102,780 148,810 20,11 248,120 (74,940) (66,910) Total assets $1,070,610 $929,290 Liabilities and Stockholders\' Equity Accounts payable Accrued expenses payable Dividends payable Common stock, $10 par Pald-In capltal: Excess of Issue price over par-common stock Retalned earnings $193,780 $183,070 24,160 8,360 45,540 217,330 126,380 571,710 541,780 $1,070,610 $929,290 19,270 10,710 57,810 Total llabilities and stockholders\' equity Additional data obtained from an examination of the accounts In the ledger for 20Y9 are as follows: d were acquired for cash. a. Equipment and lan b. There were no disposals of equipment during the year c. The Investments were sold for $97,860 cash. d. The common stock was Issued for cash e. There was a $73,610 credit to Retalned Earnings for net Income. f There was a $43,680 debit to Retalned Earnings for cash dlvidends declared.

Solution

Merrick Equipment Co Statement of Cash Flows   For the Year Ended December 31, 20Y9 Cash flows from operating activities Net Income   $      73,610 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation expense $        8,030 74940-66910 Loss on sale of investment $      10,870 108730-97860 Changes in current operating assets and liabilities Increase in accounts receivable $      (7,990) 94790-102780 Increase in inventory $      (9,500) 280640-290140 Increase in accounts payable $      10,710 193780-183070 Decrease in accrued expense payable $      (4,890) 19270-24160 $        7,230 Net cash provided by operating activities $      80,840 Cash flows from investing activities Cash from sale of investments $      97,860 Cash paid for purchase of equipment $   (71,990) 248120-320110 Cash paid for purchase of land $ (148,810) Net cash used by investing activities $ (122,940) Cash flows from financing activities Cash paid for dividends $   (41,330) 10710-8360-43680 Cash from issuance of common stock $   103,220 57810-45540+217330-126380 Net cash provided by financing activities $      61,890 Net Increase in cash and cash equivalents $      19,790 Cash and cash equivalents at beginning of period $   263,920 Cash and cash equivalents at end of period $   283,710