Determining cash flow from financing activites
The following information was drawn from the year-end balance sheets of Pet Doors. Inc.:
Account Title | 2012 | 2011 |
Bonds payable | $800,000 | $900,000 |
Common stock | 197,000 | 140,000 |
Treasury stock | 25,000 | 10,000 |
Retained earnings | 80,000 | 69,000 |
Additional information regarding transactions occurring during 2012:
1. Pet Doors, Inc., issued $50,000 of bonds during 2012. The bonds were issued at face value. All bonds retired were retired at face value.
2. Common stock did not have a par value.
3. Pet Doors, Inc., uses the cost method to account for treasury stock.
4. The amount of net income shown on the 2012 income statement was $27,000.
Required
a. Determine the amount of cash flow for the retirement of bonds that should appear on the 2012 statement of cash flows.
b. Determine the amount of cash flow from the issue of common stock that should appear on the 2012 statement of cash flows.
c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the 2012 statement of cash flows.
d. Determine the amount of cash flow for the payment of dividends that should appear on the 2012 statement of cash flows.
e. Prepare the financing activities section of the 2012 statement of cash flows.
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