Use the data in E13-7 to answer the following q,uestions. Required: 1. How would the investing section

Question:

Use the data in E13-7 to answer the following q,uestions.

Required:
1. How would the investing section of the statement of cash flows for 2017 be affected by the preceding transactions?
2. How would the equity in the earnings of Nueces Corporation and the dividends received from Nueces Corporation affect the operating section of the statement of cash flows for 2017, using the
indirect method? Explain the reasons for the effects.

M 13-7

Felicia Company acquired some of the 60,000 outstanding common shares of Nueces Corporation during 2017, as a non-current investment. The fiscal year for both companies ends December 31. The following transactions occurred during 2017:
Jan. 10 Purchased 21,000 of Nueces common shares at $12 per share.
Dec. 31 a. Received the 2017 financial statements of Nueces Corporation that reported net earnings of $90,000.
b. Nueces Corporation declared and paid a cash dividend of $0.60 per share.
c. Determined the market price of Nueces stock to be $11 per share. The decrease in price is not considered an impairment in the value of the investment.

Financial Statements
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