Following transactions occurred during 2005
a) Acquired machine with cost of $225,000 by issuing shares of common stock
b) Bonds, with $500,000 of face value and 10 years till maturity, were issued at a $35,000 premium
c) Collected $175,000 on acct
d) Declared $65,000 of dividends. Pd $50,000 declared in 2005 plus another $25,000 that was declared in 2004
e) Equipment was purchased for $250,000 by issuing a 5-year note for $200,000 and paying the balance in cash
f) Investments classified as Avail-For-Sale, with carrying value of $65,000 were sold at a $10,000 loss
g) Issued 10,000 shares of $20 par preferred stock at $35 per share
h) Machines having a book value of $125,000 were sold at a $15,000 gain
i) Purchased $315,000 of inventory on account
j) Reacquired previously issued common stock for $85,000
k)Received $225,000 for a note that matured, including $40,000 of interest
l) Trading Investments were purchased for $35,000 cash
Compute amt of Net Cash Flow FYE 12/31/05 from 1) Investing Activities 2) Financing Activities
CLUE: Net Cash flow from financing activities exceeds net cash flow from investing activities by $395,000
First we add the investing activities that bring in cash flow these are Machines Sold 140,000 and Avail-for-Sale that is 55,000 this gives us a total cash inflow of 195,000.
Then we add the cash outflow from investing activities that is investment in machinery that is ...
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