Statement of Cash Flows—Indirect Method
The comparative balance sheet of Merrick Equipment Co. forDecember 31, 20Y9 and 20Y8, is as follows:
| Dec. 31, 20Y9 | Dec. 31, 20Y8 |
| Assets | | |
| Cash | $263,410 | | $246,720 | |
| Accounts receivable (net) | 95,420 | | 88,610 | |
| Inventories | 269,380 | | 262,370 | |
| Investments | 0 | | 101,640 | |
| Land | 138,160 | | 0 | |
| Equipment | 297,200 | | 231,960 | |
| Accumulated depreciation—equipment | (69,580) | | (62,550) | |
| Total assets | $993,990 | | $868,750 | |
| | |
| Liabilities and Stockholders'Equity | | |
| Accounts payable | $179,910 | | $171,140 | |
| Accrued expenses payable | 17,890 | | 22,590 | |
| Dividends payable | 9,940 | | 7,820 | |
| Common stock, $10 par | 53,680 | | 42,570 | |
| Paid-in capital: Excess of issue price overpar-common stock | 201,780 | | 118,150 | |
| Retained earnings | 530,790 | | 506,480 | |
| Total liabilities and stockholders’ equity | $993,990 | | $868,750 | |
Additional data obtained from an examination of the accounts inthe ledger for 20Y9 are as follows:
- Equipment and land were acquired for cash.
- There were no disposals of equipment during the year.
- The investments were sold for $91,480 cash.
- The common stock was issued for cash.
- There was a $65,140 credit to Retained Earnings for netincome.
- There was a $40,830 debit to Retained Earnings for cashdividends declared.
Required:
Prepare a statement of cash flows, using the indirect method ofpresenting cash flows from operating activities. Use the minus signto indicate cash outflows, cash payments, decreases in cash, or anynegative adjustments.
| Merrick Equipment Co. |
| Statement of Cash Flows |
| For the Year Ended December 31, 20Y9 |
| Cash flows from operating activities: | | |
| Net income | $ | |
| Adjustments to reconcile net income to net cash flow fromoperating activities: | | |
| Depreciation | | |
| Loss on sale of investments | | |
| Changes in current operating assets and liabilities: | | |
| Increase in accounts receivable | | |
| Increase in inventories | | |
| Increase in accounts payable | | |
| Decrease in accrued expenses payable | | |
| Net cash flow from operating activities | | $ |
| Cash flows from (used for) investing activities: | | |
| Cash from sale of investments | $ | |
| Cash used for purchase of land | | |
| Cash used for purchase of equipment | | |
| Net cash flow used for investing activities | | |
| Cash flows from (used for) financing activities: | | |
| Cash from sale of common stock | | |
| Cash used for dividends | | |
| Net cash flow from financing activities | | |
| Increase in cash | | $ |
| Cash at the beginning of the year | | |
| Cash at the end of the year | | $ |
