Loss on sale of equipment $ 4,000 Purchase of Apon Corp. bonds (face value $400,000) 375,000 Proceeds...

Loss on sale of equipment $ 4,000
Purchase of Apon Corp. bonds (face value $400,000)  375,000
Proceeds from sale of machinery  200,000
Dividends paid  25,000
Proceeds from sale of treasury stock  100,000

how to calculate the net cash flow of investing activities?

Expert Solution

Transactions relating to assets only are investing activities.

NCF (investing activities) = Sale of machinery – Purchase of bonds

= 200,000 – 375,000

= - 175,000

Notes:

#1) NCF is negative, since cash outflow (by way of purchase of bonds) is higher.

#2) Loss on sale of equipment is an operating activity, but not investing activity.

#3) Face value of bond (400,000) is not considered, since the purchase is not made by this amount.

#4) Dividend paid is a financing activity, but not investing activity.

#5) Treasury stock is a financing item, but not investing item.

jeff jeffy answered 1 year ago

The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale are

The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale are a) Lesser than carrying amount b) Less than current fair value c) Lesser than cost d) Greater than carrying amount e) Greater than cost

On January 2, year 1, Parker Co. issued 6% bonds with a face value of $400,000...

On January 2, year 1, Parker Co. issued 6% bonds with a face value of $400,000 when the market interest rate was 8%. The bonds are due in ten years, and interest is payable every June 30 and December 31. Parker does not elect the fair value option for reporting its financial liabilities. Use the following present value and present value annuity tables to calculate the selling price of the bond on January 2, year 1. Round your final answer...

On January 1, Year 1, Mudpond Company issued bonds with a $400,000 face value, a stated...

On January 1, Year 1, Mudpond Company issued bonds with a $400,000 face value, a stated rate of interest of 5%, and a 10-year term to maturity. The bonds sold for $432,444. Mudpond uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 4%. Interest is paid annually on December 31. REQUIRED: Complete the amortization schedule below: Cash Payment Interest Expense Amortization Carrying Value 1/1/Year 1 12/31/Year 1...

Thatcher Corp. bonds will mature in 20 years and have a face value of $1,000, a...

Thatcher Corp. bonds will mature in 20 years and have a face value of $1,000, a 6.25% coupon rate paid semiannually. The price of the bonds is $1,100. The bonds are callable in 5 years at a call price of $1,090. What is their yield to maturity? What is their yield to call? What is the after-tax cost of debt on these bonds if they are not called and the tax rate is 25%?

A New Corp. wants to issue bonds with a 10% coupon rate, a face value of...

A New Corp. wants to issue bonds with a 10% coupon rate, a face value of $1,000, and 15 years to maturity. It estimates that the bonds will sell for $1,100 and that flotation costs will equal $15 per bond. The common stock currently sells for $30 per share and they can sell additional shares by incurring flotation costs of $3 per share. A dividend was paid yesterday of $4.00 per share and expects the dividend to grow at a...

CASIO Corp. issued P500,000 face value bonds on January 1, 20x8. The bonds, which will mature...

CASIO Corp. issued P500,000 face value bonds on January 1, 20x8. The bonds, which will mature on January 1, 20x11 pay interest of 12% every December 31. The bonds are issued to yield 10% interest. What is the carrying value of the bonds on December 31, 20x9?

Sim Corporation sold $400,000 of 12 percent, 10-year bonds at face value on September 1, 2014....

Sim Corporation sold $400,000 of 12 percent, 10-year bonds at face value on September 1, 2014. The issue date of the bonds was May 1, 2014. 1. Prepare the journal entries to record the sale of the bonds on September 1 and the first semiannual interest payment on November 1, 2014. 2. The company’s fiscal year ends on December 31, and this is its only bond issue. What is the bond interest expense for the year ended December 31, 2014?

On January 1, 2019, Rodgers Company purchased $400,000 face value, 10%, 3-year bonds for $390,009.00, a...

On January 1, 2019, Rodgers Company purchased $400,000 face value, 10%, 3-year bonds for $390,009.00, a price that yields a 11% effective annual interest rate. The bonds pay interest semiannually on June 30 and December 31. Required: 1. Record the purchase of the bonds. 2. Prepare an investment interest income and discount amortization schedule using the effective interest method. 3. Record the receipts of interest on June 30, 2019, and June 30, 2021.

Maschale Corp. wants to issue bonds with a zero coupon bond, a face value of $1,000,...

Maschale Corp. wants to issue bonds with a zero coupon bond, a face value of $1,000, and 12 years to maturity. Maschale estimates that the bonds will sell for $384. Maschale Corp. common stock currently sells for $30 per share. Maschale paid a dividend yesterday of $4.00 per share and expects the dividend to grow at a constant rate of 5% per year. Maschaleʹs capital structure is $4 million debt, $6 million common equity and $5 million preferred stock which...

On October 1, 2016, Indigo Corp. issued $960,000, 5%, 10-year bonds at face value. The bonds...

On October 1, 2016, Indigo Corp. issued $960,000, 5%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. Prepare the journal entry to record the issuance of the bonds. Prepare the adjusting entry to record the accrual of interest on December 31, 2016. Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2016. Prepare the journal...

Question