The following is a list of the items to be included in the preparation of Trone Companys
Question:
The following is a list of the items to be included in the preparation of Trone Company’s
2019 statement of cash flows:
a. Ordinary gain, $9,200
b. Proceeds from issuance of note, $25,000
c. Decrease in accounts receivable, $5,000
d. Payment for purchase of patent, $19,800
e. Increase in inventory, $6,700
f. Payment of dividends, $30,000
g. Decrease in accounts payable, $4,000
h. Proceeds from sale of investments, $8,500
i. Amortization of premium on bonds payable, $2,100
j. Net income, $49,200
k. Common stock exchanged for land, $14,000
l. Payment for purchase of equipment, $39,400
m. Loss on sale of investments, $4,800
n. Decrease in deferred taxes payable, $3,600
o. Proceeds from issuance of preferred stock, $52,800
p. Payment to retire bonds, $37,800
q. Depreciation expense, $10,700
r. Ending cash balance, $22,100
Required:
1. Prepare the statement of cash flows.
2. What would have happened if the company had not issued the note during 2019? How did the issuance of the note affect the company’s debt ratio at the end of 2019?
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...
Step by Step Answer:
Intermediate Accounting Reporting and Analysis
ISBN: 978-1337788281
3rd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach