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Fix cash flow statement: Carpino; Harris Co Equity Section

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Fix this statement of cash flow into proper form, indirect method:
How did the first year go?
Carpino Company Carpino Company
Statement of Cash Flow Statement of Cash Flow
For the Year Ended January 31, 2008 For the Year Ended January 31, 2008

Sources of cash Operating cash flow:
Sale of merchandise $380,000 Net Income $(35,000)
Sale of stock $420,000 Add: depreciation $55,000
sale of investment $80,000 net inflow from operating activities $20,000
depreciation $55,000
issue note $20,000 Investing cash flow:
interest in investment $6,000 sale of investment $80,000
purchase fixtures $(330,000)
Uses of cash purchase investment $(75,000)
purchase fixtures $330,000 purchase of truck $(20,000)
merchandise purchase for resale $258,000 net inflow from investing activities $(345,000)
operating expenses other than depr $160,000
purchase investment $75,000 Financing cash flow:
purchase of truck $20,000 Sale of stock $420,000
purchase treasury stock $10,000 issue note $20,000
interest on note payable $3,000 purchase treasury stock $(10,000)
net inflow from investing activities $430,000
net increase in cash $105,000
net increase in cash $105,000

Harris Corporation
Balance Sheet (partial)
At December 31, 2008

Paid in capital
Capital stock
Preferred stock, authoried 1,000,000 shares
cumulatives, $100 par value, $8 per share, 6,000
shares issues and outstanding.................................. $600,000

Common stock, authorized 5,000,000 shares, $1 par
value, 3,000,000 shares issued, and 2,700,000
outstanding................................................................... $3,000,000
total capital stock $3,600,000

Additional paid in capital
In excess of par, preferred stock $50,000
In excess of par, common stock $25,000,000
total additional paid in capital $25,050,000
total paid in capital $28,650,000

Retained earnings $900,000
Less: Common treasury stock (300,000 shares) $9,300,000
total equity $20,250,000

(a) what does cumulative mean?
(b) what did the common stock sell for?
(c) why does treasury stock have a debit balance and isn't an asset?
(d) why is it necessary to show additional paid in capital?

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Solution Summary

Classic problems!