Effects of transactions on statement of cash flows. Exhibit 4.16 in Chapter 4 provides a simplified statement of cash flows. For each of the transactions that follow, indicate the number(s) of the line(s) in Exhibit 4.16 affected by the transaction and the amount and direction (increase or decrease) of the effect. If the transaction affects net income on line (1) or cash on line (9), be sure to indicate if it increases or decreases the line. Ignore income tax effects.

a. A firm declares cash dividends of \(\$ 15,000\), of which it pays \(\$ 12,000\) immediately to its shareholders; it will pay the remaining \(\$ 3,000\) early in the next accounting period.

b. A firm borrows \(\$ 75,000\) from its bank.

c. A firm sells for \(\$ 20,000\) machinery originally costing \(\$ 40,000\) and with accumulated depreciation of \(\$ 35,000\).

d. A firm as lessee records lease payments on operating leases of \(\$ 28,000\) for the period.

e. A firm acquires, with temporarily excess cash, marketable equity securities costing \(\$ 39,000\).

f. A firm writes off a fully depreciated truck originally costing \(\$ 14,000\).

g. A marketable equity security (available for sale) acquired during the current period for \(\$ 90,000\) has a market value of \(\$ 82,000\) at the end of the period. Indicate the effect of any year-end adjusting entry to apply the market value method.

h. A firm records interest expense of \(\$ 15,000\) for the period on bonds issued several years ago at a discount, comprising a \(\$ 14,500\) cash payment and a \(\$ 500\) addition to Bonds Payable.

i. A firm records an impairment loss of \(\$ 22,000\) for the period on goodwill arising from the acquisition several years ago of an 80 -percent investment in a subsidiary.

j. A firm acquires a building costing \(\$ 400,000\), paying \(\$ 40,000\) cash and signing a promissory note to the seller for \(\$ 360,000\).

k. A firm using the allowance method records \(\$ 32,000\) of bad debt expense for the period.

1. A firm using the allowance method writes off accounts totaling \(\$ 28,000\) as uncollectible.
m. A firm owns 30 percent of the common stock of an investee acquired several years ago at book value. The investee had net income of \(\$ 40,000\) and paid dividends of \(\$ 50,000\) during the period.
n. A firm sells for \(\$ 22,000\) marketable equity securities (available for sale) originally costing \(\$ 25,000\) and with a book value of \(\$ 23,000\) at the time of sale.
o. Holders of a firm's preferred stock with a book value of \(\$ 10,000\) convert their preferred shares into common stock with a par value of \(\$ 2,000\). Use the book value method.
p. A firm gives land with an acquisition cost and market value of \(\$ 5,000\) in settlement of the annual legal fees of its corporate attorney.
q. A firm reduces the liability account Rental Fees Received in Advance for \(\$ 8,000\) when it provides rental services.
r. A firm reclassifies long-term debt of \(\$ 30,000\), maturing within the next year, as a current liability.
s. A firm using the percentage-of-completion method for long-term contracts recognizes \(\$ 15,000\) of revenue for the period.
t. A local government donates land with a market value of \(\$ 50,000\) to a firm as an inducement to locate manufacturing facilities in the area.
u. A firm writes down long-term investments in securities by \(\$ 8,000\) to reflect the market value method.
v. A firm records \(\$ 60,000\) depreciation on manufacturing facilities for the period. The firm has sold all goods it manufactured this period.
w. A firm using the allowance method recognizes \(\$ 35,000\) as warranty expense for the period.
x. A firm using the allowance method makes expenditures totaling \(\$ 28,000\) to provide warranty services during the period.
y. A firm recognizes income tax expense of \(\$ 80,000\) for the period, comprising \(\$ 100,000\) paid currently and a \(\$ 20,000\) reduction in the Deferred Income Tax Liability account.
z. A firm writes down inventories by \(\$ 18,000\) to reflect the lower-of-cost-or-market valuation.