Determining Investing and Financing Activities The following items are relevant to the preparation of a statement of cash flows for Pier Imports Inc. 1. Comparative balance sheets show a decrease of $19,200 in accrued utilities payable for the current year. 2. Nontrade short-term notes payable to banks increased $256,000 during the current year due to new borrowings. 3. The following end-of-year adjusting entry was recorded. No other interest-related transactions or entries occurred during the year. Interest Expense 38,400 Premium on Bonds Payable 2,560 Interest Payable 40,960 4. $1,600 payment was made to reduce the principal balance of a nontr
Determining Investing and Financing Activities
The following items are relevant to the preparation of a statement of
1. Comparative
2. Nontrade short-term notes payable to banks increased $256,000 during the current year due to new borrowings.
3. The following end-of-year
| Interest Expense | 38,400 | |
| Premium on Bonds Payable | 2,560 | |
| Interest Payable | 40,960 |
4. $1,600 payment was made to reduce the principal balance of a nontrade loan from a bank.
5. Gross equipment account increased $64,000 during the year,
6. Purchase of
7. Distribution of cash dividends, $16,000.
8. Sale of available-for-sale debt securities for $51,200, at a loss of $9,600.
Note: For the following questions, indicate a net
a. Determine the amount of net cash flows that would be reported in the investing section of the statement of cash flows.
| Answer |
b. Determine the amount of net cash flows that would be reported in the financing section of the statement of cash flows.
| Answer |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
