The following information was drawn from the year-end balance sheets of Solomon River, Inc. Account Year 1 Title Year 2 Bonds $750,000 $1,005,000 payable Common stock 213,000 121,000 Treasury 27,500 5,500 stock Retained 62,200 88,900 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 Determine the amount of cash flow for the retirement of bonds, for the issue of common stock, for the purchase of treasury stock and for the payment of dividends that should appear on the Year 2 statement of cash flows. Show lessA Cash flow for the retirement of a. bonds Cash flow from the issue of common stock Cash flow for the purchase of C. treasury stock Cash flow for the payment of d. dividends < Reg A to D Req E >
The following information was drawn from the year-end balance sheets of Solomon River, Inc. Account Year 1 Title Year 2 Bonds $750,000 $1,005,000 payable Common stock 213,000 121,000 Treasury 27,500 5,500 stock Retained 62,200 88,900 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 Determine the amount of cash flow for the retirement of bonds, for the issue of common stock, for the purchase of treasury stock and for the payment of dividends that should appear on the Year 2 statement of cash flows. Show lessA Cash flow for the retirement of a. bonds Cash flow from the issue of common stock Cash flow for the purchase of C. treasury stock Cash flow for the payment of d. dividends < Reg A to D Req E >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The following information was drawn from the year-end balance sheets of Solomon River, Inc.
Account
Year 1
Title
Year 2
Bonds
$750,000 $1,005,000
payable
Common stock 213,000
121,000
Treasury
27,500
5,500
stock
Retained
62,200
88,900
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
Determine the amount of cash flow for the retirement of bonds, for the issue of common
stock, for the purchase of treasury stock and for the payment of dividends that should
appear on the Year 2 statement of cash flows.
Show lessA
Cash flow for the retirement of
a.
bonds
Cash flow from the issue of
common stock
Cash flow for the purchase of
C.
treasury stock
Cash flow for the payment of
d.
dividends
< Reg A to D
Req E >
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