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a. Net income was $468,000. b. Issued common stock for $78,000 cash. c. Paid cash dividend of $16,000. d. Paid $105,000 cash to settle a long-term notes payable at its $105,000 maturity value. e. Paid $117,000 cash to acquire its treasury stock. f. Purchased equipment for $89,000 cash. Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from financing activities

a. Net income was $468,000. b. Issued common stock for $78,000 cash. c. Paid cash dividend of $16,000. d. Paid $105,000 cash to settle a long-term notes payable at its $105,000 maturity value. e. Paid $117,000 cash to acquire its treasury stock. f. Purchased equipment for $89,000 cash. Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from financing activities

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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**Statement of Cash Flows Analysis** **Given Information:** - a. Net income was $468,000. - b. Issued common stock for $78,000 cash. - c. Paid cash dividend of $16,000. - d. Paid $105,000 cash to settle a long-term notes payable at its $105,000 maturity value. - e. Paid $117,000 cash to acquire its treasury stock. - f. Purchased equipment for $89,000 cash. Use the above information to determine cash flows from financing activities. **(Amounts to be deducted should be indicated with a minus sign.)** **Explanation of Cash Flows from Financing Activities:** The partial statement of cash flows focuses on financing activities, which include transactions that affect long-term liabilities and equity. **Components:** 1. **Cash Inflows:** - **Issued Common Stock:** The business received $78,000 from issuing stock, which is a cash inflow. 2. **Cash Outflows:** - **Cash Dividends Paid:** The business distributed $16,000 in dividends, reflecting a cash outflow. - **Settling Long-term Notes Payable:** A cash payment of $105,000 was made to settle a notes payable, indicating a cash outflow. - **Acquiring Treasury Stock:** The business spent $117,000 to acquire its treasury stock, also a cash outflow. The table provided is intended to be filled with these amounts, identifying cash inflows with positive numbers and cash outflows with negative amounts, ultimately reflecting the net cash flow from financing activities.
Transcribed Image Text:**Statement of Cash Flows Analysis** **Given Information:** - a. Net income was $468,000. - b. Issued common stock for $78,000 cash. - c. Paid cash dividend of $16,000. - d. Paid $105,000 cash to settle a long-term notes payable at its $105,000 maturity value. - e. Paid $117,000 cash to acquire its treasury stock. - f. Purchased equipment for $89,000 cash. Use the above information to determine cash flows from financing activities. **(Amounts to be deducted should be indicated with a minus sign.)** **Explanation of Cash Flows from Financing Activities:** The partial statement of cash flows focuses on financing activities, which include transactions that affect long-term liabilities and equity. **Components:** 1. **Cash Inflows:** - **Issued Common Stock:** The business received $78,000 from issuing stock, which is a cash inflow. 2. **Cash Outflows:** - **Cash Dividends Paid:** The business distributed $16,000 in dividends, reflecting a cash outflow. - **Settling Long-term Notes Payable:** A cash payment of $105,000 was made to settle a notes payable, indicating a cash outflow. - **Acquiring Treasury Stock:** The business spent $117,000 to acquire its treasury stock, also a cash outflow. The table provided is intended to be filled with these amounts, identifying cash inflows with positive numbers and cash outflows with negative amounts, ultimately reflecting the net cash flow from financing activities.
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### Financial Transactions Overview - **Net Income**: $468,000 - **Issuance of Common Stock**: $78,000 cash received. - **Cash Dividend Paid**: $16,000 - **Repayment of Long-term Notes Payable**: $105,000 - **Purchase of Treasury Stock**: $117,000 - **Equipment Purchase**: $89,000 ### Calculating Cash Flows from Financing Activities The information is utilized to determine the effect on cash flows from financing activities. Amounts to be deducted are indicated with a minus sign. #### Statement of Cash Flows (Partial) | Description | Amount ($) | |------------------------------------------|-------------| | **Cash flows from financing activities** | | | Issued common stock | 78,000 | | Paid cash dividend | (16,000) | | Repaid long-term notes payable | (105,000) | | Purchased treasury stock | (117,000) | | Cash paid for equipment | (89,000) | | **Net cash used in financing activities**| **(249,000)** | ### Diagram Explanation The table represents cash flow transactions affecting financing activities, illustrating increases and decreases in cash due to specific financial transactions. Positive amounts indicate cash inflows (e.g., issuing stock), while negative amounts represent cash outflows (e.g., paying dividends, repurchasing stock). The net cash flow from financing activities amounts to a decrease of $249,000. This breakdown is useful for understanding how different activities impact a company's cash position and for analyzing financial strategies.
Transcribed Image Text:### Financial Transactions Overview - **Net Income**: $468,000 - **Issuance of Common Stock**: $78,000 cash received. - **Cash Dividend Paid**: $16,000 - **Repayment of Long-term Notes Payable**: $105,000 - **Purchase of Treasury Stock**: $117,000 - **Equipment Purchase**: $89,000 ### Calculating Cash Flows from Financing Activities The information is utilized to determine the effect on cash flows from financing activities. Amounts to be deducted are indicated with a minus sign. #### Statement of Cash Flows (Partial) | Description | Amount ($) | |------------------------------------------|-------------| | **Cash flows from financing activities** | | | Issued common stock | 78,000 | | Paid cash dividend | (16,000) | | Repaid long-term notes payable | (105,000) | | Purchased treasury stock | (117,000) | | Cash paid for equipment | (89,000) | | **Net cash used in financing activities**| **(249,000)** | ### Diagram Explanation The table represents cash flow transactions affecting financing activities, illustrating increases and decreases in cash due to specific financial transactions. Positive amounts indicate cash inflows (e.g., issuing stock), while negative amounts represent cash outflows (e.g., paying dividends, repurchasing stock). The net cash flow from financing activities amounts to a decrease of $249,000. This breakdown is useful for understanding how different activities impact a company's cash position and for analyzing financial strategies.
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