Each of the following items must be considered in preparing a statement of cash flows for Cruz

Question:

Each of the following items must be considered in preparing a statement of cash flows for Cruz Fashions Inc. for the year ended December 31, 2020.

1. Fixed assets that had cost $20,000 6½ years before and were being depreciated on a 10-year basis, with no estimated scrap value, were sold for $4,750.

2. During the year, goodwill of $15,000 was considered impaired and was completely written off to expense.

3. During the year, 500 shares of common stock with a stated value of $25 a share were issued for $32 a share.

4. The company sustained a net loss for the year of $2,100. Depreciation amounted to $2,000 and patent amortization was $400.

5. Uncollectible accounts receivable in the amount of $2,000 were written off against Allowance for Doubtful Accounts.

6. Debt investments (available-for-sale) that cost $12,000 when purchased 4 years earlier were sold for $10,600.

7. Bonds payable with a par value of $24,000 on which there was an unamortized bond premium of $2,000 were redeemed at 101.

Instructions

For each item, state where it is to be shown in the statement and then how you would present the necessary information, including the amount. Consider each item to be independent of the others. Assume that correct entries were made for all transactions as they took place.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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