Determining Investing and Financing Activities

The following items are relevant to the preparation of a statement of cash flows for Tropical Products Inc.

1. Sale of common stock, $400,000.

2. Retirement of bonds payable, $284,000.

3. Purchase of land, $8,000.

4. Sale of equipment for $19,200, at a loss of $4,000.

5. Purchase of equity securities (not held in a trading account), $8,000.

6. Declaration of cash dividends, $32,000.

7. Loan of $24,000 resulting in a note receivable, nontrade.

8. Purchase of a patent, $16,000.

9. Proceeds from the issuance of a short-term nontrade note, $8,000.

Note: For the following questions, indicate a net cash outflow with a negative sign.

a. Determine the amount of net cash flows that would be reported in the investing section of a statement of cash flows.

Answer

b. Determine the amount of net cash flows that would be reported in the financing section of a statement of cash flows.

Answer

Determining Investing and Financing Activities The following items are relevant to the preparation of a statement of cash flows for Tropical Products Inc. 1. Sale of common stock, $400,000. 2. Retirement of bonds payable, $284,000. 3. Purchase of land, $8,000. 4. Sale of equipment for $19,200, at a loss of $4,000. 5. Purchase of equity securities (not held in a trading account), $8,000. 6. Declaration of cash dividends, $32,000. 7. Loan of $24,000 resulting in a note receivable, nontrade. 8. Purchase of a patent, $16,000. 9. Proceeds from the issuance of a short-term nontrade note, $8,000. Note: For the following questions, indicate a net cash outflow with a negative sign. a. Determine the amount of net cash flows that would be reported in the investing section of a statement of cash flows. 5 (36,800) b. Determine the amount of net cash flows that would be reported in the financing section of a statement of cash flows. $ 92.000 x