Question
In January 2022, the management ofCullumberCompany concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During the year,
In January 2022, the management ofCullumberCompany concludes that it has sufficient cash to purchase some short-term investments in debt and stock securities. During the year, the following transactions occurred.
Jan.1Purchased70$1,000,9% TRC bonds for $70,000. Interest is payable annually on December 31.Feb.
1Purchased1,160shares of LAF common stock for $49,880.Mar.
1Purchased460shares of NCL common stock for $17,940.
July
1Received a cash dividend of $0.90per share on the LAF common stock.Aug.
1Sold183shares of LAF common stock at $42per share.Sept.
1Received $2per share cash dividend on the NCL common stock.
Dec.
31Received the annual interest on the TRC bonds.31Sold the TRC bonds for $72,143.
At December 31, the fair values of the LAF and NCL common stocks were $39and $32per share, respectively. These stock investments byCullumberCompany provide less than a 20% ownership interest.
(a)
Journalize the above transactions.
Post to the accounts Debt Investments and Stock Investments.
Kiley Corporation had these transactions during 2022.
Indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity.
(a)Purchased a machine for $30,000, giving a long-term note in exchange.Select a type of activity
Investing ActivitiesFinancing ActivitiesNoncash Investing and Financing ActivitiesOperating Activities
(b)Issued $50,000 par value common stock for cash.Select a type of activity
Investing ActivitiesFinancing ActivitiesNoncash Investing and Financing ActivitiesOperating Activities
(c)Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000.Select a type of activity
Noncash Investing and Financing ActivitiesOperating ActivitiesFinancing ActivitiesInvesting Activities
(d)Declared and paid a cash dividend of $13,000.Select a type of activity
Investing ActivitiesOperating ActivitiesNoncash Investing and Financing ActivitiesFinancing Activities
(e)Sold a long-term investment with a cost of $15,000 for $15,000 cash.Select a type of activity
Financing ActivitiesOperating ActivitiesInvesting ActivitiesNoncash Investing and Financing Activities
(f)Collected $16,000 from sale of goods.
Select a type of activity
Noncash Investing and Financing ActivitiesFinancing ActivitiesInvesting ActivitiesOperating Activities
(g)Paid $18,000 to suppliers.
An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Hailey Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary.
Indicate where each item should be presented in the statement of cash flows (indirect method) using these four major classifications: operating activity (that is, the item would be listed among the adjustments to net income to determine net cash provided by operating activities under the indirect method), investing activity, financing activity, or significant noncash investing and financing activity.
(a)Exchange of land for patent.Select a classification
Investing ActivityFinancing ActivityOperating ActivityNoncash Investing and Financing Activity
(b)Sale of building at book value.Select a classification
Operating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity
(c)Payment of dividends.Select a classification
Operating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity
(d)Depreciation.Select a classification
Financing ActivityInvesting ActivityNoncash Investing and Financing ActivityOperating Activity
(e)Conversion of bonds into common stock.Select a classification
Operating ActivityInvesting ActivityFinancing ActivityNoncash Investing and Financing Activity
(f)Issuance of capital stock.Select a classification
Financing ActivityNoncash Investing and Financing ActivityInvesting ActivityOperating Activity
(g)Amortization of patent.Select a classification
Noncash Investing and Financing ActivityInvesting ActivityFinancing ActivityOperating Activity
(h)Issuance of bonds for land.Select a classification
Noncash Investing and Financing ActivityFinancing ActivityOperating ActivityInvesting Activity
(i)Purchase of land.Select a classification
Investing ActivityOperating ActivityNoncash Investing and Financing ActivityFinancing Activity
(j)Loss on disposal of plant assets.Loss on sale.Select a classification
Operating ActivityFinancing ActivityInvesting ActivityNoncash Investing and Financing Activity
Cash proceeds from sale.Select a classification
Operating ActivityNoncash Investing and Financing ActivityFinancing ActivityInvesting Activity
(k)Retirement of bonds.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started