Homework Answers
Correct Answer:
Requirement 1:
Option: ($ 56,000)
Explanation: Since the cash outflow is Equal to $ 56,000 therefore the whole amount will be recorded as a negative amount under cash flow from financing activities, irrespective of the carrying value of the bond.
Requirement 2:
Option: $ 13,963 would be subtracted, while determining cash flows from Financing activities.
Working:
It will be subtracted because the cash is going out from the business.
|
Dividend paid |
|
|
Beginning balance of retained earning |
$ 3,30,975 |
|
Add: Net income |
$ 41,101 |
|
Less: Ending balance of Retained earnings |
$ (3,58,113) |
|
Dividend paid |
$ 13,963 |
End of Answer.
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