Explain what effect the following transactions would have on cash and how they would be shown in

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Explain what effect the following transactions would have on cash and how they would be shown in a cash flow statement.
1. A $2,000,000 piece of equipment is purchased with the proceeds of a new 12-month note.
2. Mortgage bonds are retired with $790,000 cash and the proceeds of an issue of 150,000 shares of common stock.
3. $2,000,000 of inventory is purchased on account.
4. A dividend of $0.25 per share is declared on the 750,000 outstanding shares.
5. A piece of machinery is sold for $1,500,000 cash. When originally purchased, it cost Anwat $5,000,000, and currently has $2,500,000 of accumulated depreciation.
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...
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Accounting Texts and Cases

ISBN: 978-1259097126

13th edition

Authors: Robert Anthony, David Hawkins, Kenneth Merchant

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