Question

Inventories increased by $5,400, Prepaid Expenses decreased by $1,000, Accounts Pavable decreased by $14,000, and Accrued Liabilities decreased by $1,700. Use the indirect method to determine net cash flows from operating activities. LO4 Cash Flows from Investing Activities and Noncash Transactions SE 6. During 2010, Howard Company purchased land for $375,000. It paid $125,000 in cash and signed a $250,000 mortgage for the rest. The company also sold for $95,000 cash a building that originally cost $90,000, on which it! had $70,000 of accumulated depreciation, making a gain of $75,000. Prepare the cash flows from investing activities section and the schedule of noncash investing and financing transactions of the statement of cash flows. L05 Cash Flows from Financing Activities SE 7. During 2010, Arizona Company issued $500,000 in long-term bonds at 96, repaid $75,000 of bonds at face value, paid interest of $40,000, and paid dividends of $25,000. Prepare the cash flows from the financing activities section of the statement of cash flows.

Answer 1

4)

Cash flows from Investing activities section

Cash payment to purchase land	- 125,000
Cash receipts from sale of building	95,000
Net cash used in investing activities	- $30,000

Schedule of non cash investing and financing transactions

Note payable issued to buy land

$250,000

5)

Cash flows from Financing activities section

Cash proceeds from issuing long term bonds	480,000
Redemption of bonds	- 75,000
Cash paid for dividend	- 25,000
Net cash provided by financing activities	$380,000

Cash proceeds from issuing long term bonds = 500,000 x 96%

= $480,000

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