Problem

Determining cash flows from financing activitiesThe following accounts and corresponding b...

Determining cash flows from financing activities

The following accounts and corresponding balances were drawn from Poole Company’s 2012 and 2011 year-end balance sheets:

Account Title

2012

2011

Bonds payable

$300,000

. $210,000

Common stock

550,000

450,000

Other information drawn from the accounting records:

1. Dividends paid during the period amounted to $40,000.

2. There were no bond liabilities repaid during the period.

Required

a. Compute the amount of cash flow associated with the issue of bond liabilities.


b. Compute the amount of cash flow associated with the issue of common stock.


c. Prepare the financing activities section of the statement of cash flows.

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