Determining cash flows from financing activities The following information was drawn from the year-end balance sheets of
Question:
Determining cash flows from financing activities The following information was drawn from the year-end balance sheets of Sports Supply, Inc.:
Additional information regarding transactions occurring during 2012:
1. Sports Supply, Inc., issued $70,000 of bonds during 2012. The bonds were issued at face value. All bonds retired were retired at face value.
2. Common stock did not have a par value.
3. Sports Supply, Inc., uses the cost method to account for treasury stock. Sports Supply, Inc., did not resell any treasury stock in 2012.
4. The amount of net income shown on the 2012 income statement was $36,000.
Required
a. Determine the amount of cash flow for the retirement of bonds that should appear on the 2012 statement of cash flows.
b. Determine the amount of cash flow from the issue of common stock that should appear on the 2012 statement of cash flows.
c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the 2012 statement of cash flows.
d. Determine the amount of cash flow for the payment of dividends that should appear on the 2012 statement of cash flows.
e. Prepare the financing activities section of the 2012 statement of cash flows.
Step by Step Answer:
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds