Effects on statement of cash flows. Exhibit 4.16 in Chapter 4 provides a simplified statement of cash flows with numbered lines. For each of the transactions that follow, indicate the number(s) of the line(s) affected by the transaction and state 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. The firm issues bonds for \(\$ 100,000\) cash.

b. The firm issues a note with a fair market value of \(\$ 100,000\) for a building.

c. The firm retires, for \(\$ 90,000\) cash, bonds with a book value of \(\$ 100,000\).

d. The firm calls for \(\$ 105,000\) and retires bonds with a book value of \(\$ 100,000\).

e. The firm records interest expense and expenditures for the first half of a year on bonds. The bonds have a face value of \(\$ 100,000\) and a book value at the beginning of the year of \(\$ 90,000\). The coupon rate is 10 percent, paid semiannually in arrears, and the bonds were originally issued to yield 12 percent, compounded semiannually.

f. The firm records interest expense and expenditures for the first half of a year on bonds. The bonds have a face value of \(\$ 100,000\) and a book value at the beginning of the year of \(\$ 105,000\). The coupon rate is 12 percent, paid semiannually in arrears, and the bonds were originally issued to yield 10 percent, compounded semiannually.