The comparative balance sheets for 2018 and 2017 and the income statement for 2018 are given below

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The comparative balance sheets for 2018 and 2017 and the income statement for 2018 are given below for Arduous Company. Additional information from Arduous's accounting records is provided also.

The comparative balance sheets for 2018 and 2017 and the
The comparative balance sheets for 2018 and 2017 and the

Additional information from the accounting records:
a. Investment revenue includes Arduous Company's $6 million share of the net income of Demur Company, an equity method investee.
b. Treasury bills were sold during 2018 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents.
c. A machine originally costing $70 million that was one-half depreciated was rendered unusable by a flood.
Most major components of the machine were unharmed and were sold for $17 million.
d. Temporary differences between pretax accounting income and taxable income caused the deferred income tax liability to increase by $3 million.
e. The preferred stock of Tory Corporation was purchased for $25 million as a long-term investment.
f. Land costing $46 million was acquired by issuing $23 million cash and a 15%, four-year, $23 million note payable to the seller.
g. The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $82 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2018.
h. $60 million of bonds were retired at maturity.
i. In February, Arduous issued a 4% stock dividend (4 million shares). The market price of the $5 par value common stock was $7.50 per share at that time.
j. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $9 million.
Required:
Prepare the statement of cash flows of Arduous Company for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (A reconciliation schedule is not required.)

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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...
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,...
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Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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