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The following information was drawn from the year-end balance sheets of Benson River, Inc. Account Title Bonds payable Common stock Treasury stock Retained earnings
The following information was drawn from the year-end balance sheets of Benson River, Inc. Account Title Bonds payable Common stock Treasury stock Retained earnings Year 2 $635,000 Year 1 $1,100,000 212,000 126,000 26,000 13,000 88,700 66,300 Additional Information regarding transactions occurring during Year 2: 1. Benson River, Inc. issued $43,500 of bonds during Year 2. The bonds were issued at face value. All bonds retired were retired at face value. 2. Common stock did not have a par value. 3. Benson River, Inc. uses the cost method to account for treasury stock. 4. The amount of net income shown on the Year 2 income statement was $32,500. Required a. Determine the amount of cash flow for the retirement of bonds that should appear on the Year 2 statement of cash flows. b. Determine the amount of cash flow from the issue of common stock that should appear on the Year 2 statement of cash flows. c. Determine the amount of cash flow for the purchase of treasury stock that should appear on the Year 2 statement of cash flows. d. Determine the amount of cash flow for the payment of dividends that should appear on the Year 2 statement of cash flows. e. Prepare the financing activities section of the Year 2 statement of cash flows. Complete this question by entering your answers in the tabs below.
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