Problem

Determining Cash Flow Statement Effects of Investments for Significant Influence (AP12-5)D...

Determining Cash Flow Statement Effects of Investments for Significant Influence (AP12-5)

During 2011, Bradford Company purchased some of the 90,000 shares of common stock, par $6, of Hall, Inc., as a long-term investment. The annual accounting period for each company ends December 31. The following transactions occurred during 2011:

Jan. 7

Purchased 40,500 shares of Hall stock at $30 per share.

Dec. 31

a. Received the 2011 financial statements of Hall, which reported net income of $215,000.

b. Hall declared and paid a cash dividend of $1.50per share.

c. Determinedthat the current market price of Hall stock was $41 per share.

 

Required:

Indicate how the Operating Activities and Investing Activities sections of the cash flow statement (indirect method) will be affected by each transaction.

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