is:       Dec. 31, 20Y9        Dec. 31, 20Y8 Assets           Cash $70,720     $47,940   Accounts receivable (net) 207,230     188,190   Inventories 298,520     289,850   Investments 0     102,000   Land 295,800     0   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—common stock 354,000     204,000   Retained earnings 393,960     354,280   Total liabilities and stockholders' equity $1,211,760     $901,680   The income statement for the year ended December 31, 20Y9, is as follows: Sales   $2,023,898 Cost of goods sold   1,245,476 Gross profit   $778,422 Operating expenses:     Depreciation expense $14,790   Other operating expenses 517,299      Total operating expenses   532,089 Operating income   $246,333 Other expenses:     Loss on sale of investments   (10,200) Income before income tax   $236,133 Income tax expense   94,453 Net income   $141,680 Additional data obtained from an examination of the accounts in the 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 $91,800 cash. The common stock was issued for cash. There was a $102,000 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the direct 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. Merrick Equipment Co. Statement of Cash Flows For the Year Ended December 31, 20Y9 Cash flows from operating activities:     Cash received from customers  $   Cash payments for merchandise      Cash payments for operating expenses      Cash payments for income taxes      Net cash flow from operating activities   $ Cash flows from investing activities:     Cash received from sale of investments  $   Cash paid for purchase of land      Cash paid for purchase of equipment      Net cash flow used for investing activities     Cash flows from financing activities:     Cash received from sale of common stock  $   Cash paid for dividends      Net cash flow from financing activities     Change in cash    $ Cash at beginning of the year     Cash at end of the year   $   Feedback   Consider what account(s) would have an impact on determining how much cash is received during the period. Which account(s) would have an impact on determining how much was paid out in cash during the period? Were there any purchases or sales of noncurrent assets during the year? Did the company engage in any activities that affected the equity or debt in their company? Appendix 2.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. is:

          Dec. 31, 20Y9        Dec. 31, 20Y8
    Assets          
    Cash $70,720     $47,940  
    Accounts receivable (net) 207,230     188,190  
    Inventories 298,520     289,850  
    Investments 0     102,000  
    Land 295,800     0  
    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—common stock 354,000     204,000  
    Retained earnings 393,960     354,280  
    Total liabilities and stockholders' equity $1,211,760     $901,680  

    The income statement for the year ended December 31, 20Y9, is as follows:

    Sales   $2,023,898
    Cost of goods sold   1,245,476
    Gross profit   $778,422
    Operating expenses:    
    Depreciation expense $14,790  
    Other operating expenses 517,299  
       Total operating expenses   532,089
    Operating income   $246,333
    Other expenses:    
    Loss on sale of investments   (10,200)
    Income before income tax   $236,133
    Income tax expense   94,453
    Net income   $141,680

    Additional data obtained from an examination of the accounts in the 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 $91,800 cash.
    4. The common stock was issued for cash.
    5. There was a $102,000 debit to Retained Earnings for cash dividends declared.

    Required:

    Prepare a statement of cash flows, using the direct 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.

    Merrick Equipment Co.
    Statement of Cash Flows
    For the Year Ended December 31, 20Y9
    Cash flows from operating activities:    
    Cash received from customers  $  
    Cash payments for merchandise     
    Cash payments for operating expenses     
    Cash payments for income taxes     
    Net cash flow from operating activities   $
    Cash flows from investing activities:    
    Cash received from sale of investments  $  
    Cash paid for purchase of land     
    Cash paid for purchase of equipment     
    Net cash flow used for investing activities    
    Cash flows from financing activities:    
    Cash received from sale of common stock  $  
    Cash paid for dividends     
    Net cash flow from financing activities    
    Change in cash    $
    Cash at beginning of the year    
    Cash at end of the year   $
     
    Feedback
     

    Consider what account(s) would have an impact on determining how much cash is received during the period. Which account(s) would have an impact on determining how much was paid out in cash during the period? Were there any purchases or sales of noncurrent assets during the year? Did the company engage in any activities that affected the equity or debt in their company?

    Appendix 2.

 

 

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