Question
1) In February of 2015, The Kennedy Corporation sold equipment with a Book Value of $72,500 and an original cost of $158,000 was sold at
1) In February of 2015, The Kennedy Corporation sold equipment with a Book Value of $72,500 and an original cost of $158,000 was sold at a loss of $22,000. As a result of this transaction, the company took a book loss on its Income Statement. Please explain how and where this transaction should be shown on the Statement of Cash Flows? Please provide a detailed discussion.
2) In analyzing the current assets and current liabilities on the comparative Balance Sheet, Merchandise Inventory and Prepaid Insurance increased by $75,000 and $15,000 respectively and Accounts Payable increased by $10,000 and Unearned Sales Revenue decreased by $9,000. How and where should these items be shown on the Statement of Cash Flows? Please provide a detailed discussion.
3) On June 05, 2015, Kennedy Corporation acquired a large tract of land in exchange for 15,000 shares of $1.00 par value Kennedy Corporation common stock. The fair market value (FMV) of the Land is $25,000. How and where should this transaction be shown on the Statement of Cash Flows? Please provide a detailed discussion.
4) On July 07, 2015, Kennedy Corporation redeemed $500,000 of its 6% Debenture Bonds at 105. Kennedy Corporation also paid a dividend of $200,000 to its common shareholders. How and where should these transactions be shown on the Statement of Cash Flows? Please provide a detailed discussion.
5) At December 31, 2015, The Kennedy Corporation reported $2,500,000 of net income for the calendar year. It also reported the following transactions: Included in the net income was a book gain on the sale of property for $250,000; it also took depreciation deductions of $300,000 on depreciable assets included in property plant & equipment. Please provide a detailed discussion.
Please help me explain how and where each of the following transactions item 1-5 should be shown on the statement of cash flows.
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