The following information was drawn from the year-end balance sheets of Solomon River, Inc. Account Title Year 1 Year 2 Bonds $750,000 $1,005,000 payable Common stock 213,000 Treasury 121,000 27,500 5,500 stock Retained 88,900 62,200 earnings Additional information regarding transactions occurring during Year 2: 1. Solomon River, Inc. issued $42,300 of bonds during Year 2. The bonds were issued at face value. All bonds retired were retired at face value. 2. Common stock did not have a par value. 3. Solomon River, Inc. uses the cost method to account for treasury stock. 4. The amount of net income shown on the Year 2 income statement was $32,700. Required a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash flows. b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of cash flows. c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of cash flows. d. Determine the amount of cash flow for the payment of dividends that should appear on the Year 2 statement of cash flows e. Prepare the financing activities section of the Year 2 statement of cash flows. Complete this question by entering your answers in the tabs below. Req A to Req E D Prepare the financing activities section of the year 2 statement of cash flows. (Cash outflows should be indicated with minus sign.) Cash Flows from financing activities Net cash flow from financing $ 0 activities Req A to D Req E
The following information was drawn from the year-end balance sheets of Solomon River, Inc. Account Title Year 1 Year 2 Bonds $750,000 $1,005,000 payable Common stock 213,000 Treasury 121,000 27,500 5,500 stock Retained 88,900 62,200 earnings Additional information regarding transactions occurring during Year 2: 1. Solomon River, Inc. issued $42,300 of bonds during Year 2. The bonds were issued at face value. All bonds retired were retired at face value. 2. Common stock did not have a par value. 3. Solomon River, Inc. uses the cost method to account for treasury stock. 4. The amount of net income shown on the Year 2 income statement was $32,700. Required a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash flows. b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of cash flows. c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of cash flows. d. Determine the amount of cash flow for the payment of dividends that should appear on the Year 2 statement of cash flows e. Prepare the financing activities section of the Year 2 statement of cash flows. Complete this question by entering your answers in the tabs below. Req A to Req E D Prepare the financing activities section of the year 2 statement of cash flows. (Cash outflows should be indicated with minus sign.) Cash Flows from financing activities Net cash flow from financing $ 0 activities Req A to D Req E
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:The following information was drawn from the year-end balance sheets of Solomon River, Inc.
Account
Title
Year 1
Year 2
Bonds
$750,000 $1,005,000
payable
Common stock 213,000
Treasury
121,000
27,500
5,500
stock
Retained
88,900
62,200
earnings
Additional information regarding transactions occurring during Year 2:
1. Solomon River, Inc. issued $42,300 of bonds during Year 2. The bonds were issued at face value. All bonds retired
were retired at face value.
2. Common stock did not have a par value.
3. Solomon River, Inc. uses the cost method to account for treasury stock.
4. The amount of net income shown on the Year 2 income statement was $32,700.
Required
a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash
flows.
b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of
cash flows.
c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of
cash flows.
d. Determine the amount of cash flow for the payment of dividends that should appear on the Year 2 statement of cash
flows
e. Prepare the financing activities section of the Year 2 statement of cash flows.
Complete this question by entering your answers in the tabs below.
Req A to
Req E
D
Prepare the financing activities section of the year 2 statement of cash flows. (Cash
outflows should be indicated with minus sign.)
Cash Flows from financing
activities
Net cash flow from financing
$
0
activities
Req A to D
Req E
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