60.1K

Verified Solution

Link Copied!

Six Measures of Solvency or Profitability The followinn Hata wore taken from the finanrial etatomente of Catoe Inr fine the rurront fieral uear Assuming that total assets were $7,000,000 at the beginning of the current fiscal year, determine the following. Round to one decimal place. Statement of Cash Flows-Indirect Method The comparative balance sheet of Merrick Equipment Co. for December 31, 20 Y9 and 20Y8, is as follows: Additional data obtained from an examination of the accounts in the ledger for 20Yy are 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. Required: Prepare a statement of cash flows, using the indirect 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. Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 14,790 Loss on sale of investments 10,200 Changes in current operating assets and liabilities: Increase in accounts receivable 19,040 Increase in inventories 8,670 Decrease in accounts payable 11,560 Decrease in accrued expenses payable 3,740 $ Net cash flow from operating activities 179,980 Cash flows from (used for) investing activities: Cash from sale of investments $ 91,800 Cash used for purchase of land 295,800 Cash used for purchase of equipment 80,580 Net cash flow used for investing activities 284,580 Cash flows from (used for) financing activities: Cash from sale of common stock $ 152,000 Cash used for dividends 102,000 Net cash flow from financing activities 50,000 $ Decrease in cash 54,600 Cash at the beginning of the year 70,720 Cash at the end of the year

Answer & Explanation Solved by verified expert

See Answer