INTERMEDIATE ACCOUNTING
8th Edition
ISBN: 9780078025839
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 21, Problem 21.9BE
Investing activities
• LO21–5
Carter Containers sold marketable securities, land, and common stock for $30 million, $15 million, and $40 million, respectively. Carter also purchased
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Q 23.21:
Last year, Alpha Corporation spent $250,000 to repurchase 15,000 shares of its own outstanding common stock. The company also paid $40,000 in interest on a construction loan that it had obtained from its bank. How should these transactions be reflected on Alpha’s annual statement of cash flows, and why?
A :
The two transactions should be reported in separate sections of the statement because one involves long-term assets while the other involves long-term liability. Specifically, Alpha should record a $250,000 cash outflow in the investing section and a $40,000 cash outflow in the financing section.
B :
The two transactions should be reported in separate sections of the statement because one involves a change in equity while the other involves a change in income. Specifically, Alpha should record a $250,000 cash outflow in the financing section and a $40,000 cash outflow in the operating section.
C :
Both transactions should be reported in the…
Exercise 12-10A (Algo) Determining cash flows from investing activities LO 12-3
[The following information applies to the questions displayed below]
The following accounts and corresponding balances were drawn from Delsey Company's Year 2 and Year 1 year-end
balance sheets:
Account Title
Investment securities
Machinery
Land
Year 2
$101,800 $ 116,900
Year 1
520,300
145,800
425,000
93,800
Other information drawn from the accounting records:
1. Delsey Incurred a $1,340 loss on the sale of investment securities during Year 2.
2. Old machinery with a book value of $5,000 (cost of $25,530 minus accumulated depreciation of $20,530) was sold.
The income statement showed a gain on the sale of machinery of $4,880.
3. Delsey did not sell land during the year.
Exercise 12-10A (Algo) Part b
b. Compute the amount of cash flow associated with the purchase of machinery.
Cost of machinery purchased
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING
Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2QCh. 21 - Prob. 21.3QCh. 21 - Prob. 21.4QCh. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q
Ch. 21 - Perhaps the most noteworthy item reported on an...Ch. 21 - Prob. 21.12QCh. 21 - Given sales revenue of 200,000, how can it be...Ch. 21 - Prob. 21.14QCh. 21 - When determining the amount of cash paid for...Ch. 21 - Prob. 21.16QCh. 21 - When using the indirect method of determining net...Ch. 21 - Prob. 21.18QCh. 21 - Prob. 21.19QCh. 21 - Where can we find authoritative guidance for the...Ch. 21 - U.S. GAAP designates cash outflows for interest...Ch. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Prob. 21.5BECh. 21 - Prob. 21.6BECh. 21 - BE 21–7
Installment note
LO21–3, LO21–6
On...Ch. 21 - BE 21–8
Sale of land
LO21–3, LO21–4, LO21–5
On...Ch. 21 - Investing activities LO215 Carter Containers sold...Ch. 21 - Financing activities LO216 Refer to the situation...Ch. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Classification of cash flows LO213 through LO216...Ch. 21 - Determine cash paid to suppliers of merchandise ...Ch. 21 - Determine cash received from customers LO213...Ch. 21 - Prob. 21.4ECh. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Determine cash paid for bond interest LO213...Ch. 21 - Determine cash paid for bond interest LO213 For...Ch. 21 - Determine cash paid for income taxes LO213...Ch. 21 - Prob. 21.10ECh. 21 - E21–11
Bonds; statement of cash flow...Ch. 21 - E21–12
Installment note: statement of cash flow...Ch. 21 - Prob. 21.13ECh. 21 - E 21–14
Identifying cash flows from investing...Ch. 21 - E 21–15
Lease; lessee; statement of cash flows...Ch. 21 - Prob. 21.16ECh. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.18ECh. 21 - Prob. 21.19ECh. 21 - Prob. 21.20ECh. 21 - Prob. 21.21ECh. 21 - Indirect method; reconciliation of net income to...Ch. 21 - Prob. 21.23ECh. 21 - Prob. 21.24ECh. 21 - Prob. 21.25ECh. 21 - Prob. 21.26ECh. 21 - Prob. 21.27ECh. 21 - Prob. 21.28ECh. 21 - Prob. 21.29ECh. 21 - Prob. 21.30ECh. 21 - Prob. 21.31ECh. 21 - Prob. 21.32ECh. 21 - Prob. 1CPACh. 21 - Prob. 2CPACh. 21 - Prob. 3CPACh. 21 - Prob. 4CPACh. 21 - Prob. 5CPACh. 21 - Prob. 6CPACh. 21 - Prob. 7CPACh. 21 - Prob. 8CPACh. 21 - Prob. 9CPACh. 21 - Prob. 1CMACh. 21 - Prob. 2CMACh. 21 - Prob. 3CMACh. 21 - Prob. 21.1PCh. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Prob. 21.6PCh. 21 - Prob. 21.7PCh. 21 - Prob. 21.8PCh. 21 - Prob. 21.9PCh. 21 - Prob. 21.10PCh. 21 - Prob. 21.11PCh. 21 - Prob. 21.12PCh. 21 - Prob. 21.13PCh. 21 - Prob. 21.14PCh. 21 - Prob. 21.15PCh. 21 - Prob. 21.16PCh. 21 - Prob. 21.17PCh. 21 - Prob. 21.18PCh. 21 - Prob. 21.19PCh. 21 - Prob. 21.20PCh. 21 - Prob. 21.21PCh. 21 - Prob. 21.1BYPCh. 21 - Prob. 21.2BYPCh. 21 - Prob. 21.3BYPCh. 21 - Prob. 21.5BYPCh. 21 - Prob. 21.6BYPCh. 21 - Prob. 21.7BYPCh. 21 - Prob. 21.8BYPCh. 21 - Prob. 21.10BYPCh. 21 - Research Case 219 FASB codification; locate and...Ch. 21 - IFRS Case 2110 Statement of cash flows...
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- Complete part a and b and part c if possible!arrow_forwardQS 12-9 (Algo) Computing investing cash flows LO P3 Indicate the effect each separate transaction has on investing cash flows. (Amounts to be deducted should be Indicated with a minus sign.) a. Sold a truck costing $48,000, with $25,200 of accumulated depreciation, for $11,200 cash. The sale results in a $11,600 loss. b. Sold a machine costing $13,800, with $9,600 of accumulated depreciation, for $8,200 cash. The sale results in a $4,000 gain. c. Purchased stock Investments for $24,000 cash. The purchaser belleves the stock is worth at least $33,200. Cash flows from investing activities $arrow_forwardCash and cash equivalents 5,14 P 3,985,000 Receivables, net 6,14 7,742,000 Inventories 7 15,859,000 Short-term investments 8,14 3,280,000 Other current assets 10 352,000 Total current assets P 31,218,000 Note 8 on investments described the investments as equity securities held primarily for being traded to takeadvantage of price fluctuations in the market. The following information shows the breakdown of the investmentaccount per client's subsidiary records: Held for Trading Securities: Securities No. ofShares MarketPrice Amount SMCOrdinary 5,000 176 P 880,000 AC Ordinary 3,000 800 2,400,000 Total P 3,280,000 You were able to verify that the quantity and valuation of the shares as of December 31, 2019 were appropriate. Based on your substantive test of details of transactions and balances for the investment account you gatheredthe following information for 2020: SMC…arrow_forward
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