Question

The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 20Y9 and 20Y8, 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 in excess of 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 outflows, 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 (used for) operating activities:
Net income	$
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 balance, January 1, 20Y9
Cash balance, December 31, 20Y9		$

Answer 1

cash flow Statement
Cash flows from operating activities
cash received from customer	2004858
cash payment for merchandise	-1242586
cash paid for operating expense	-513559
cash payment for income tax	-94453
Net cash provided from operating activities		154260
Cash flows from investing activities:
cash received from sale of investment	91800
cash paid for land purchase	-295800
Cash paid for purchase of equipment	-80580
Net cash used for investing activities		-284580
Cash flows from Financing activities:
Cash received from Issue of shares	250000
Dividend paid	-96900
Net cash provided from financing activities		153100
Net cash increase		22780
Cash balance in beginning		47940
Ending balance of cash		70720