Question
Investing and Financing Cash Flows The following information was obtained from Melville Company's comparative balance sheet. End of Year Beginning of Year Cash $19,000 $9,000
Investing and Financing Cash Flows
The following information was obtained from Melville Company's comparative balance sheet.
End of Year | Beginning of Year | |
---|---|---|
Cash | $19,000 | $9,000 |
Accounts receivable | 50,000 | 35,000 |
Inventory | 55,000 | 49,000 |
Prepaid rent | 6,000 | 8,000 |
Long-term investments | 21,000 | 32,000 |
Plant assets | 140,000 | 106,000 |
Accumulated depreciation | (42,000) | (32,000) |
Accounts payable | 24,000 | 22,000 |
Income tax payable | 4,000 | 6,000 |
Common stock | 127,000 | 92,000 |
Retained earnings | 106,000 | 91,000 |
Capital expenditures | 15,200 |
Assume that Melville Companys income statement showed depreciation expense of $10,000, a gain on sale of investments of $7,000, and a net income of $60,000.
During the year, Melville Company purchased plant assets for cash, sold investments for cash (the entire $7,000 gain developed during the year), and issued common stock for cash. The firm also declared and paid cash dividends.
What items and amounts will appear in (a) the cash flow from investing activities and (b) the cash flow from financing activities sections of a statement of cash flows?
Use a negative sign with cash outflow answers.
a.
Cash flow from investing activities will show | |
Purchase of plant assets | Answer |
Sale of investments | Answer |
b.
Cash flow from financing activities will show | |
Issuance of common stock | Answer |
Payment of dividends | Answer |
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