Determining Investing and Financing Activities

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

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

2. Retirement of bonds payable, $710,000.

3. Purchase of land, $20,000.

4. Sale of equipment for $48,000, at a loss of $10,000.

5. Purchase of equity securities (not held in a trading account), $20,000.

6. Declaration of cash dividends, $80,000.

7. Loan of $60,000 resulting in a note receivable, nontrade.

8. Purchase of a patent, $40,000.

9. Proceeds from the issuance of a short-term nontrade note, $20,000.

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.

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