Dec. 31. Dec. 31. 20Y9 20Y8 Assets Cash $ 70,720 $ 47,940 Accounts receivable (net) 207,230 188,190 Inventories | 298,520 289,850 Investments 102,000 Land 295,800 Equipment 438,600 358,020 Accumulated depreciation-equipment (99,110) (84,320) Total assets $1,211,760 $901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors $ 205,700 $194,140 Accrued expenses payable (operating expenses| 30,600 26,860 Dividends payable | 25,500 20,400 Common stock, $1 par 202,000 |102,000 Paid-in capital: Excess of issue price over par- 354,000 | 204,000 common stock Retained earnings 393,960 354,280 Total liabilities and stockholders' equity $1,211,760 $901,680

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Statement of cash flows-indirect method
The comparative balance sheet of Merrick Equipment Co. for December
31, 2019 and 20Y8, is as follows: (attached)

Additional data obtained from an examination of the accounts in the
ledger for 2019 arc 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 $91,800 cash.
D. The common stock was issued for cash.
E. There was a $141,680 credit to Retained Earnings for net income.
F. There was a $102,000 debit to Retained Earnings for cash
dividends declared.

Instructions
Prepare a statement of cash flows, using the indirect method of
presenting cash flows from operating activities.

Dec. 31.
Dec. 31.
20Y9
20Y8
Assets
Cash
$ 70,720
$ 47,940
Accounts receivable (net)
207,230
188,190
Inventories
| 298,520
289,850
Investments
102,000
Land
295,800
Equipment
438,600
358,020
Accumulated depreciation-equipment
(99,110)
(84,320)
Total assets
$1,211,760 $901,680
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors
$ 205,700 $194,140
Accrued expenses payable (operating expenses| 30,600
26,860
Dividends payable
| 25,500
20,400
Common stock, $1 par
202,000
|102,000
Paid-in capital: Excess of issue price over par-
354,000
| 204,000
common stock
Retained earnings
393,960
354,280
Total liabilities and stockholders' equity
$1,211,760 $901,680
Transcribed Image Text:Dec. 31. Dec. 31. 20Y9 20Y8 Assets Cash $ 70,720 $ 47,940 Accounts receivable (net) 207,230 188,190 Inventories | 298,520 289,850 Investments 102,000 Land 295,800 Equipment 438,600 358,020 Accumulated depreciation-equipment (99,110) (84,320) Total assets $1,211,760 $901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors $ 205,700 $194,140 Accrued expenses payable (operating expenses| 30,600 26,860 Dividends payable | 25,500 20,400 Common stock, $1 par 202,000 |102,000 Paid-in capital: Excess of issue price over par- 354,000 | 204,000 common stock Retained earnings 393,960 354,280 Total liabilities and stockholders' equity $1,211,760 $901,680
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