The following information was drawn from the year-end balance sheets of Fox River, Inc. The following is
Question:
The following information was drawn from the year-end balance sheets of Fox River, Inc.
The following is additional information regarding transactions that occurred during Year 2:
1. Fox River, Inc. issued $100,000 of bonds during Year 2. The bonds were issued at face value. All bonds retired were retired at face value.
2. Common stock did not have a par value.
3. Fox River, Inc. uses the cost method to account for treasury stock.
4. The amount of net income shown on the Year 2 income statement was $32,000.
Required
a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash flows.
b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of cash flows.
c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of cash flows.
d. Determine the amount of cash flow for the payment of dividends that should appear on the Year 2 statement of cash flows.
e. Prepare the financing activities section of the Year 2 statement of cash flows.
Step by Step Answer:
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds