An analysis of Martin Corporations operational asset accounts provided the following information: a. Acquired a large machine

Question:

An analysis of Martin Corporation’s operational asset accounts provided the following information:
a. Acquired a large machine that cost $26,000, paying for it by giving a $15,000, 12 percent interest bearing note due at the end of two years and 500 shares of its common stock, with a of $10 per share and a market value of $22 per share.
b. Acquired a small machine that cost $8,700. Full payment was made by transferring a tract of land that had a book value of $8,700.

Required:
1. Show how this information should be reported on the statement of cash flows.
2. What would be the effect of these transactions on the capital acquisitions ratio? How might these transactions distort interpretation of the ratio?

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...