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Statement of Cash Flows—Indirect Method

The comparative balance sheet of Olson-Jones Industries Inc. forDecember 31, 20Y2 and 20Y1, is as follows:

		Dec. 31, 20Y2		Dec. 31, 20Y1
Assets
Cash		$180		$59
Accounts receivable (net)		103		73
Inventories		65		40
Land		148		165
Equipment		83		64
Accumulated depreciation-equipment		(22)		(11)
	Total Assets	$557		$390
Liabilities and Stockholders'Equity
Accounts payable (merchandise creditors)		$70		$59
Dividends payable		11		-
Common stock, $1 par		37		18
Paid-in capital: Excess of issue price overpar—common stock		89		46
Retained earnings		350		267
	Total liabilities and stockholders' equity	$557		$390

The following additional information is taken from therecords:

1. Land was sold for $43.
2. Equipment was acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $120 credit to Retained Earnings for netincome.
6. There was a $37 debit to Retained Earnings for cash dividendsdeclared.

a. Prepare a statement of cash flows, using theindirect 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.

Olson-Jones Industries Inc.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
Net income	$
Adjustments to reconcile net income to net cash flow fromoperating activities:
Depreciation
Gain on sale of land
Changes in current operating assets and liabilities:
Increase in accounts receivable
Increase in inventories
Increase in accounts payable
Net cash flow from operating activities		$
Cash flows from (used for) investing activities:
Cash from sale of land	$
Cash used for purchase of equipment
Net cash flow from 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		$

b. Was Olson-Jones Industries Inc.’s net cashflow from operations more or less than net income?
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1. 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:

   1. Equipment and land were acquired for cash.
   2. There were no disposals of equipment during the year.
   3. The investments were sold for $91,480 cash.
   4. The common stock was issued for cash.
   5. There was a $65,140 credit to Retained Earnings for netincome.
   6. 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:
   	$
   Adjustments to reconcile net income to net cash flow fromoperating activities:
   Changes in current operating assets and liabilities:
   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 at the beginning of the year
   Cash at the end of the year		$