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During the current year, Bradford Company purchased some of the 120,000 shares of common stock, par $6, of Hall, Inc., as a long- term investment.
During the current year, Bradford Company purchased some of the 120,000 shares of common stock, par $6, of Hall, Inc., as a long- term investment. The annual accounting period for each company ends December 31. The following transactions occurred during the current year: Jan. 7 Purchased 48,000 shares of Hall stock at $36 per share. Dec. 31: a. Received the current year financial statements of Hall, which reported net income of $218,000. b. Hall declared and paid a cash dividend of $1.40 per share. c. Determined that the current market price of Hall stock was $47 per share. Required: Indicate how the Operating Activities and Investing Activities sections of the cash flow statement (indirect method) will be affected by each transaction. (Cash outflows should be indicated by a minus sign.) BRADFORD COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, Current Year Operating activities: Dividends received from investee 67,200 Investing activities: Purchase of investments (1,728,000)
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