Determining Investing and Financing Activities

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

1. Comparative balance sheets show a decrease of $9,600 in accrued utilities payable for the current year.

2. Nontrade short-term notes payable to banks increased $128,000 during the current year due to new borrowings.

3. The following end-of-year adjusting entry was recorded. No other interest-related transactions or entries occurred during the year.

interest expense	19200
premium on bonds payable	1280
interest payable		20480

4. A $800 cash payment was made to reduce the principal balance of a nontrade loan from a bank.

5. Gross equipment account increased $32,000 during the year, accumulated depreciation increased $12,800, and depreciation expense for the period is $16,000. One item of equipment (cost $16,000, accumulated depreciation $3,200) was sold during the year; a gain of $1,600 on the sale was recognized.

6. Purchase of treasury stock, $48,000 cash.

7. Distribution of cash dividends, $8,000.

8. Sale of available-for-sale debt securities for $25,600, at a loss of $4,800.

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

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

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