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136 indicate the section operating activities investing activities financing activit 4296887

 

136. Indicate the section (operating activities, investing activities, financing activities, or none) in which each of the following would be reported on the statement of cash flows prepared by the indirect method:
 

(a)

Gain on sale of fixed assets

(b)

Operating income

(c)

Retirement of long-term debt

(d)

Sale of capital stock

(e)

Distribution of stock dividends

(f)

Payment of cash dividends

(g)

Purchase of fixed assets

(h)

Sale of fixed assets

(i)

Receipt of interest revenue

(j)

Payment of interest expense

 

 

 

137. State the section(s) of the statement of cash flows prepared by the indirect method (operating activities, investing activities, financing activities, or not reported) and the amount that would be reported for each of the following transactions:
 

(a)

Received $145,000 from the sale of land costing $70,000.

(b)

Purchased investments for $50,000.

(c)

Declared $35,000 cash dividends on stock. $5,000 dividends were payable at the beginning of the year, and $6,000 were payable at the end of the year.

(d)

Acquired equipment for $32,000 cash.

(e)

Declared and issued 100 shares of $20 par common stock as a stock dividend, when the market price of the stock was $32 a share.

(f)

Recognized by an adjusting entry depreciation for the year, $48,000.

(g)

Issued 85,000 shares of $10 par common stock for $25 a share, receiving cash.

(h)

Issued $500,000 of 20-year, 10% bonds payable at 99.

(i)

Borrowed $43,000 from Busey National Bank, issuing a 5-year, 8% note for that amount.

 

 

 

138. Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:
 

(a)

Increase in prepaid expenses

(b)

Amortization of patents

(c)

Increase in salaries payable

(d)

Gain on sale of fixed assets

(e)

Decrease in accounts receivable

(f)

Increase in notes receivable due in 60 days

(g)

Amortization of discount on bonds payable

(h)

Decrease in merchandise inventory

(i)

Depreciation of fixed assets

(j)

Loss on retirement of long-term debt

(k)

Decrease in accounts payable

(l)

Increase in notes payable due in 30 days

(m)

Amortization of premium on bonds payable

 

 

 

139. On the basis of the details of the common stock account presented below, assemble in memorandum form the data needed to prepare a statement of cash flows, indicating the section of the statement in which the data would appear.
 

Common Stock, $10 Par

 

 

 

 

 

     Balance

Date

 

Item

Debit

Credit

Debit

Credit

20–

 

 

 

 

 

 

Jan. 1

Balance, 50,000
  shares

 

500,000

Mar. 7

5,000 shares issued at
  par for cash

50,000

 

550,000

Sept. 20

1000-share stock
  dividend

10,000

 

560,000

Dec. 10

1,000 shares issued at
  $20 for cash

20,000

 

580,000

 

 

 

 

 

 

 

 

140. The net income reported on an income statement for the current year was $59,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.
 

 

End

Beginning

Cash

$65,000

$  70,000

Accounts receivable (net)

70,000

57,000

Inventories

86,000

102,000

Prepaid expenses

4,000

4,500

Accounts payable

 

 

  (merchandise creditors)

51,000

58,000

Cash dividends payable

4,500

6,500

Salaries payable

6,000

7,500

 

 

 

 

 

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