Question

1. Effect of Transactions on Cash Flows

   State the effect (cash receipt or cash payment and amount) of each of the following transactions, considered individually, on cash flows:

   1. Retired $330,000 of bonds, on which there was $3,300 of unamortized discount, for $343,000.
   2. Sold 12,000 shares of $15 par common stock for $24 per share.
   3. Sold equipment with a book value of $67,300 for $96,900.
   4. Purchased land for $449,000 cash.
   5. Purchased a building by paying $85,000 cash and issuing a $120,000 mortgage note payable.
   6. Sold a new issue of $220,000 of bonds at 99.
   7. Purchased 3,800 shares of $20 par common stock as treasury stock at $37 per share.
   8. Paid dividends of $1.50 per share. There were 25,000 shares issued and 4,000 shares of treasury stock.

   	Effect	Amount
   a.	Cash payment	$
   b.	Cash receipt	$
   c.	Cash receipt	$
   d.	Cash payment	$
   e.	Cash payment	$
   f.	Cash receipt	$
   g.	Cash payment	$
   h.	Cash payment	$

Answer 1

B3 ~ fic : * A B a. C D E F G Effect a. Cash payment Cash receipt Amount 343,000 288,000 96,900 $ Cash receipt $ soos - 60 = Cash payment 449,000 Cash payment 85,000 f. Cash receipt $ 217,800 Cash payment $ 140,600 h. Cash payment $ 31,500

For calculations, refer to the image below -

a. Effect Amount a. Cash payment $ =343000 Cash receipt =12000*24 Cash receipt =96900 d. Cash payment $ =449000 e. Cash payment =85000 f. Cash receipt $ = 220000*99% Cash payments =3800*37 h. Cash payment $ =(25000-4000)*1.5

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