Question

In preparation for developing its statement of cash flows for the year ended December 31, 2018, Millennium Solutions, Inc. collected the following information:

Payment for the early extinguishment of long-term notes (book value: $100 million) $108.1
Sale of common shares 352.1
Retirement of common shares 244.1
Loss on sale of equipment 4.1
Proceeds from sale of equipment 16.1
Issuance of short-term note payable for cash 20.1
Acquisition of building for cash 14.1
Purchase of marketable securities (not a cash equivalent) 10.1
Purchase of marketable securities (considered a cash equivalent) 2.1
Cash payment for 3-year insurance policy 6.1
Collection of note receivable with interest (principal amount, $22) 26.1
Declaration of cash dividends 66.1
Distribution of cash dividends declared in 2020 60.1

Required:
a. Prepare the investing activities section of Millennium's statement of cash flows for 2018.
b. Prepare the financing activities section of Millennium's statement of cash flows for 2018.

Answer 1

Answer and Explanation:

The preparation of the investing and the financing activities is presented below:

1) Investing activities

Proceeds from the sale of equipment 16

Purchase of building -14

Purchase of marketable securities -10

Collection of notes receivable 26

Net cash flow from investing activities 18

2) Financing activities

Payment of long term notes -108

Sales of common share 352

Retirement of shares -244

Issue short term notes payable 20

Dividend paid -60

Net cash flow from financing activities -40