The following items are relevant to the preparation of a statement of cash flows for Tropical Inc.
Question:
The following items are relevant to the preparation of a statement of cash flows for Tropical Inc.
1. Sale of common stock, $300,000.
2. Retirement of bonds payable, $213,000.
3. Purchase of land, $6,000.
4. Sale of equipment for $14,400, at a loss of $3,000.
5. Purchase of equity securities (not held in a trading account), $6,000.
6. Declaration of cash dividends, $24,000.
7. Loan of $18,000 resulting in a note receivable, nontrade.
8. Purchase of a patent, $12,000.
9. Proceeds from the issuance of a short-term nontrade note, $6,000.
Note: For the following questions, indicate a net cash outflow with a negative sign.
a. Determine the amount of net cash flows that would be reported in the investing section of a statement of cash flows.
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b. Determine the amount of net cash flows that would be reported in the financing section of a statement of cash flows.
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