Angelas Angels Corp.s policy is to report all cash inflows from interest and dividends in the investing

Question:

Angela’s Angels Corp.’s policy is to report all cash inflows from interest and dividends in the investing section and cash outflows arising from interest and dividends in the financing section. Angela’s activities for the year ended December 31, 2016, included the following:

  • Declared and issued a stock dividend valued at $50,000.
  • Issued $500,000 in ordinary shares.
  • Accounts payable decreased $28,000 during the year.
  • Paid $985,000 to repurchase bonds. The book value of the bonds was $1,000,000.
  • Made a $10,000 principal payment on a bank loan.
  • Interest expense for the period was $18,000. The interest payable account increased $2,000.
  • Declared a $10,000 cash dividend payable on January 15, 2017.
  • Acquired an automobile costing $40,000 under a finance lease.


Required:
a. Prepare the cash flows from financing activities section of the statement of cash flows.
b. Identify how the activities listed above that are not financing activities would be reported in the statement of cash flows assuming that the statement is prepared using the indirect method.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 9787300071374

3rd Edition Vol. 1

Authors: Kin Lo, George Fisher

Question Posted: