13-2 State of the effect (...
State of the effect ( cash receipt or payment and amount) of cash of each the following transactions, considered individually on cash flows;
- sold a new issue of $200,000 of bonds at 99
- purchased 4,000 shares of $35 per common stock on treasury stock of 470 per share
- sold 10,000shares of $20 par common stock for $50 per share
- purchased building by paying $60,000 cash and issuing a $100,000mortgage note payable
- retired $250,000, on which there was $2,500 of unamortized discount,for $260,000
- purchased land for $320,000 cash
- paid dividends of $2.00 per share . there were 25,000 shares issued and 4,000 shares of treasury stock.
- Sold equipment with a book value of $50,000 for $72,000
Identify the type of cash flow activity for each of the following events( operating,investing or financing)
- issued common stock
- redeemed bonds
- issued preferred stock
- purchased patents
- net income
- paid cash dividends
- purchased treasury stock
- sold long term investment
- sold equipment
- purchased building
- issued bonds
indicate whether each of the following would be added or deducted from net incomein determining net cash flow from operating activities by the indirect method:
a decrease in account receivable
b. increase in note payable due in 90 days to vendors
c. decrease in salaries payable
d. decrease in prepaid expenses
e. gain on retirement of long term debt
f decrease in accounts payable
g. increase in notes receivable due in 90 days from customers.
h. depreciation of fixed assets
i. increase in merchandise inventory
j. amortization of patent
k. loss on disposal of fixed assets.
On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the financing section of the statement of cash flows, assuming the gain or loss on retiring the bonds.
Account Bonds payable
Account discount on pond payable
on the basic of the details of the following fixed asset account, indicate the items to be reported on the statement of cash flows:
Purchased for cash
Sold for $210,000
13-6the net income reported on the income statement for the current year was $120,000. Depreciation recorded on equipment and a building amounted to$62,500 for the year balance of the current asset and current liability accounts at the beginning and end of the year are as follows:
End of year
Beginning of year
Account receivable (net)
Account payable (merchandise creditors)
- prepare the cash flows from operating activities section of thes statement of cash flow, using the indirect method
- if the direct method had been used , would the net cash flow from operating activities have been the same, explain?