Effects of transaction on statement of cash flows. Exhibit 5.16 in Chapter 5 provides a simplified statement of cash flows. For each of the transactions that follow, indicate the number(s) of the line(s) in Exhibit 5.16 affected by the transaction and the amount and direction (increase or decrease) of the effect. If the transaction affects net income on line (3) or cash on line (11), be sure to indicate if it increases or decreases the line. Expand the definition of Line (1) to include receipts from other operating revenue sources. Ignore income tax effects. Indicate the effects of each transaction on the Cash Change Equation.

a. A firm declares cash dividends of $15,000, of which it pays $12,000 immediately to its shareholders; it will pay the remaining $3,000 early in the next accounting period.
6. A firm borrows $75,000 from its bank.
c. A firm sells for $20,000 machinery originally costing $40,000 and with accumulated depreciation of $35,000.
d. A firm as lessee records lease payments on operating leases of $28,000 for the period.
e. A firm acquires, with temporarily excess cash, marketable equity securities costing $39,000
f. A firm writes off a fully depreciated truck originally costing $14,000.
g. A marketable equity security (available for sale) acquired during the current period for $90,000 has a fair value of $82,000 at the end of the period. Indicate the effect of any year-end adjusting entry to apply the market value method.
h. A firm records interest expense of $15,000 for the period on bonds issued several years ago at a discount, comprising a $14,500 cash payment and a $500 addition to Bonds Payable.
i. A firm records an Impairment loss of $22,000 for the period on goodwill arising from the acquisition several years ago of an 80% investment in asubsidiary

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Simplified Statement of Cash Flows (Problem 5.5 for Self-Study) EXHIBIT 5.16 Operations Cash Receipts from Customers Less: Cash Payments to Suppliers, Employees, and Others Cash Flow from Operations [- (1) - (2)] .. (1) -(2) S1 Reconciliation of Net Income to Cash Flow from Operations Net Income .... Additions to Net Income to Compute Cash Flow from Operations Subtractions from Net Income to Compute Cash Flow from Operations.. Cash Flow from Operations [- (3) + (4) - (5)1 - +(4) (5) 51 Investing Proceeds from Dispositions of "Investing" Assets.. Cash Used to Acquire "Investing" Assets. Cash Flow from Investing [- (6) - (7)) +(6) -(7) S2 Financing +(8) (9) (10) Cash Provided by Increases in Debt or Capital Stock. Cash Used to Reduce Debt or Capital Stock.... Cash Used for Dividends.. Cash Flow from Financing (- (8) - (9) - (10)). Net Change in Cash [- 51 + S2 + 53] Cash, Beginning of the Period... Cash, End of the Period [- (11) + S4 . S3 (11) 54 55