Question

State the effect (cash receipt or payment and amount) of each of the following transactions, considered individually, on cash flows:

Sold equipment with a book value of $62,000 for $89,300.
Sold a new issue of $150,000 of bonds at 97.
Retired $340,000 of bonds, on which there was $3,400 of unamortized discount, for $354,000.
Purchased 5,300 shares of $15 par common stock as treasury stock at $27 per share.
Sold 7,000 shares of $10 par common stock for $24 per share.
Paid dividends of $1.50 per share. There were 34,000 shares issued and 5,000 shares of treasury stock.
Purchased land for $392,000 cash.
Purchased a building by paying $75,000 cash and issuing a $90,000 mortgage note payable.
A.) Cash Receipt: $
B.) Cash Receipt: $
C.) Cash Payment: $
D.) Cash Payment: $
E.) Cash Receipt: $
F.) Cash Payment: $
G.) Cash Payment: $
H.) Cash Payment: $

Answer 1

1. Sold equipment with a book value of $62,000 for $89,300.

Cash Receipt

Amount = $89,300

2. Sold a new issue of $150,000 of bonds at 97

Cash Receipt

Amount = $145,500 ($150,000*97%)

3. Retired $340,000 of bonds, on which there was $3,400 of unamortized discount, for $354,000.

Cash Payment

Amount = $354,000 ($340,000+$3,400)

4. Purchased 5,300 shares of $15 par common stock as treasury stock at $27 per share.

Cash Payment

Amount = $143,100 (5,300*$27)

5. Sold 7,000 shares of $10 par common stock for $24 per share.

Cash Receipt

Amount = $168,000 (7,000*$24)

6. Paid dividends of $1.50 per share. There were 34,000 shares issued and 5,000 shares of treasury stock.

Cash Payment

Amount = $43,500 [(34000-5000)*$1.5]

7. Purchased land for $392,000 cash.

Cash Payment

Amount = $392,000

8. Purchased a building by paying $75,000 cash and issuing a $90,000 mortgage note payable

Cash Payment

Amount = $75,000