State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows:
(a) Sold a new issue of $200,000 of bonds at 99.
(b) Purchased 4,000 shares of $35 par common stock as treasury stock at $70 per share.
(c) Sold 10,000 shares of $20 par common stock for $50 per share.
(d) Purchased a building by paying $60,000 cash and issuing a $100,000 mortgage note payable.
(e) Retired $250,000 of bonds, on which there was $2,500 of unamortized discount, for $260,000.
(f) Purchased land for $320,000 cash.
(g) Paid dividends of $2.00 per share. There were 25,000 shares issued and 4,000 shares of treasury stock.
(h) Sold equipment with a book value of $50,000 for $72,000.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Chapter # 16- Statement of Cash Flows
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Question Posted: September 05, 2011 09:18:53